Reviewed by Roger Keeran

 

Red Roulette:  An Insider’s Story of Wealth, Power, Corruption and Vengeance in Today’s China by Desmond Shum.  London and New York et al.:  Simon & Schuster, 2021. $14.99. Pp. 310.

 

 

Red Roulette recounts the life of Desmond Shum, the story of his birth in Shanghai in 1968, his upbringing in Hong Kong, his education at the University of Wisconsin—Madison, and his ascendancy to one of the wealthiest men in China, a billionaire responsible for renovating the Beijing airport and for building the capital’s most lavish hotel and commercial complex.  To some, Shum’s rise proves China’s fall:  from the aspirational socialism of Mao to the crude capitalism of today.  Yet, a close reading of Shum’s book suggests that the story is not so simple, that the struggle between capitalism and socialism in China continues.

Reflecting on how one becomes part of a power elite, the American sociologist, C. Wright Mills, said (and I paraphrase from memory) that many ways lead to the top.  One could work, marry, or steal one’s way to the top, but the safest, surest, and most common way was to be born there.  Part of the fascination of Shum’s story is that he was not born there.  Shum recalls his modest upbringing in a shabby Hong Kong apartment where at night rats ran over the bed.  His is a rags-to-riches story in a Chinese context, a Horatio Alger tale with Chinese characteristics.  Shum credits his rise partly to luck.  Part of his luck was being a good swimmer, a talent that opened certain doors for him that were unavailable to others.  Part of his luck was being part of the generation positioned to take advantage of Deng Xiaoping’s new policies of reform and opening up that began in 1979.  This process greatly accelerated in 1992, when Deng Xiaoping made his so-called southern journey to Shenzhen on Hong Kong’s border and “unleashed a new round of capitalist zeal.”  Shum joined a firm that took advantage of the opening up to sell Heineken beer and Marlboro cigarettes to the mainland.  Under these circumstances, people like Shum could believe that accumulating personal wealth was making a patriotic contribution to modernizing the nation.  Shum’s greatest luck of all was meeting and then marrying Whitney Duan, a capable and driven woman, also from a modest background, who had cultivated a personal and business relationship with Zhang Beili, the wife of China’s Vice Premier (and in 2003, Premier), Wen Jiabao.  Though Wen Jiabao played no direct role in the business dealings of the Shums,  their proximity to the highest echelons of Chinese political power greatly facilitated their ability to make deals, garner investments, and accumulate wealth.

There is much in Shum’s account to shock and depress anyone with socialist sensibilities.  For example, the inequality of wealth and conspicuous consumption Shum describes rivals anything in the West.  As billionaires, Shum and his wife lived in a lavish apartment in Beijing.  Shum collected expensive sports cars and rare wine.   They enjoyed jaunts abroad like a wine tasting dinner at Chateau Lafite Rothschild in June 2011, in which the wine for nine people cost over $100,000.  Shum and his wife dined at Lei Garden in Beijing where their favorite dishes of sea bass and fish maw soup went for $500 and $1000 a plate.  Shum’s wife, Whitney, bought herself a pink diamond for $15 million.   Equally appalling was  the symbiosis between the rising billionaires and the Party and government elite and their families, connections tied together by nepotism, corruption, and favors.  Shum claims the children of many Party and government leaders acted like an aristocracy: “they intermarried, lived lives disconnected from those of average Chinese, and made fortunes selling access to their parents, inside information, and regulatory approval that were keys to wealth.”  These aristocrats included an investor named Feng Bo who married the granddaughter of Party leader, Deng Xiaoping, and who drove around Beijing in a red Rolls-Royce convertible.

Aside from the insider’s view of the lives of the rich and famous,   Shum provides  insights into historical and contemporary Chinese culture—its mores, values, ways of conducting personal and business relationships and so forth–insights that transcend politics.  For example, Shum claims that the “opening up” of the economy not only opened the country to investment but opened up people’s consumer and sexual appetites.   He describes the “shock and awe” strategies that Chinese businessmen used to seduce foreign investors as well as local power brokers.    He also points out that long before the “opening up” the Chinese valued “connections” with the powerful to achieve success.  Though Shum attempts to put the best face on his own cupidity,  he makes a strong case that his ambition (and that of his wife) fit perfectly with the ethos after 1992, when Deng Xiaoping urged “a resumption of market-oriented changes”  and said, “to get rich is glorious.”   In this period,  it was possible for both Shum and his wife to belong to the Communist Party, to admire Donald Trump’s Art of the Deal,  and to believe that making scads of money was patriotic and important for China, as long as they were building the internet, apartments, airports, hotels, and malls.

Along side capitalist triumphalism, another thread, less dramatic but no less persistent,  runs through Shum’s account:  in spite of  all their wealth and connections, the Chinese capitalists lack power.   Though some capitalists rake in the renminbi,  the Communist Party runs things including the capitalists, and the capitalists do not control the Communist Party.  Though Shum did not like it, he had to admit that “in China’s schools, state-owned enterprises, and research institutions, Party secretaries call the shots.”  According to Shum, this inferiority fed frustration and fear among his follow entrepreneurs.  “Entrepreneurs,” he rued, “had been the engines of China’s growth, but we were never trusted.”   Through philanthropy and other means, Shum made persistent efforts to extend his influence and push liberal ideas but apparently without much success.

Undoubtedly, the Party welcomed the burst of private enterprise and accumulation.  Deng Xiaoping announced that with the “opening-up” a small group would “get rich first.”  In 2001, under Jiang Zemin, the Party even invited capitalists to join its ranks.   The Party, however, never relaxed its control.  If Shum is to be believed, in recent years, particularly after Xi Jinping became General Secretary in 2012, the Communist Party actually increased its power and influence,.

Shum gives many examples of the subordinate and dependent place of capitalists.  Though Shum spearheaded some of the largest development projects in China, including the modernization of the Beijing airport and the building of Beijing’s Bulgari hotel complex,  he could not operate on his own but had to show how his projects adhered to the latest Party five-year plan.   He complained that the Party were “our masters” and “the rules were skewed toward state firms.”  According to Shum, what many in the West interpreted as steps toward privatization, such as listing China Telecom on the New York Stock Exchange, amounted  “in reality”  to the Party using  Western financial techniques to strengthen state industries and bolster its authority.  For the wealthy Chinese, it may not be lonely at the top, but it is precarious.  According to Shum, two thirds of the people on China’s one hundred wealthiest fell from the list each year, sometimes because of poor business decisions, but often because they fell out of favor with the Party, or because of criminality and prosecutions.   Soon after Xi Jinping became Party head in 2012, he launched “a massive anti-corruption campaign.”  By 2020, according the Shum, Chinese “authorities had investigated more than 2.7 million officials for corruption and punished more than 1.5 million, including seven national-level leaders and two dozen generals.”  Some, like Li Peiying, the manager of the Beijing airport with whom Shum worked, were executed.  Even the two principals of this book, Shum and his wife, Whitney Duan, in spite of their immense wealth and powerful friends, faced punishment.  Duan was apparently arrested in 2017, and Shum was seemingly forced into exile.

Shum  concedes the Chinese contradictions.  Party corruption exists side by side with Communist probity.    The story of Premier Wen Jiabao, whose wife partnered in business with the Shums, personified the paradox.  According to Shum,  Wen’s wife and children engaged in all sorts of money making schemes,  but Wen himself  remained incorruptible, totally devoted to his Party work, and uninvolved and unaware of his families’ shady doings.  When made aware of their business activities, Wen became “livid” and demanded a divorce.

There is no reason to doubt the accuracy Shum’s account of the excesses brought by the policy of reform and opening-up.  China, however, is very big and complex, and one would be mistaken to take Desmond Shum’s snapshot as a picture of the whole.   While Shum and his wife dined on fish maw and fine wine,  China was in the process of eliminating extreme poverty for millions and raising the living standards of all Chinese.  To put Shum’s account in perspective  and appreciate the vitality of  China’s advances toward socialism, one should read such other accounts as Duncan McFarland, editor, A China Reader (Changemaker Publications, 2021).

 

-Roger Keeran is now Professor Emeritus of the Empire State College at SUNY after retiring in 2013.  He has taught at Cornell, Princeton, Rutgers, and the State University of New York.  In 1980, he published The Communist Party and the Autoworkers Unions.