Desmond Shum - Red Roulette: An Insiders Story of Wealth, Power, Corruption, and Vengeance in Todays China

Powerful and disturbing An honest, fifirsthand account of what really goes on in [Chinas] corridors of power. BILL BROWDER, author of the #1 New York Times bestseller Red Notice

Red Roulette

An Insiders Story of Wealth, Power, Corruption, and Vengeance in Todays China

Desmond Shum

For Hong Kong and Whitney Duan.

I wish I had the right words; just know I care.

Better to speak out and die than keep silent and live.

Fan Zhongyan (9891052)

INTRODUCTION

ON SEPTEMBER 5, 2017, WHITNEY DUAN , age fifty, disappeared from the streets of Beijing. She was last seen the day before in her sprawling office at Genesis Beijing, a development project she and I had built worth more than $2.5 billion. There, cocooned in a work space that visitors reached after running a gauntlet of security guards, meticulously landscaped gardens, and a dozen varieties of Italian marble, Whitney had masterminded real estate projects worth billions more. And now suddenly she was gone.

How had that happened? And who is Whitney Duan?

Whitney Duan was my wife and business partner for more than a decade. By that point, we were divorced, but for many years wed been close collaborators and confidants and together had enjoyed the wildest of rides. Wed achieved our shared dream of doing great things in China for China. Coming from poverty, wed been seized with a desire to make something of our lives. We were awed by our own success.

Wed built one of the biggest logistical hubs in the world at the Beijing Capital International Airport. Wed conceived and constructed the swankiest hotel and business center in Chinas capitallocated on a choice swath of real estate near the citys bustling heart. Wed done stock deals that netted us hundreds of millions of dollars. Wed operated at the center of power in China, cultivating premiers, high-ranking members of the Chinese Communist Party, and their families. Wed counseled the up-and-coming officials who had all of China in their grasp. Wed pushed for social and political changes to make China a better place. By doing well, we believed we could do good. Wed done the math; our net wealth totaled in the billions.

But now shed disappeared. From my home in England, I reached out to Whitneys housekeeper, who said that Whitney hadnt returned from work on that day in September 2017 and hadnt been seen since. It was as if shed been vaporized.

I called people in the company wed founded and learned that Whitney wasnt the only one to have vanished. Two senior executives in her firmalong with a junior assistant who doubled as a housekeeperwere also missing. None have been heard from since. Id only just left Beijing in late July, having dropped off our son for a summer with his mother. I wondered: Might I have disappeared, too, if Id stayed a few more weeks in China?

Unexplained disappearances occur regularly in China, where the Communist Party holds a monopoly on power. Despite legal protections enshrined in Chinas constitution, Party investigators flout those rules to seize anyone on the flimsiest of pretexts and hold them indefinitely. These days Chinese Communist operatives even perform snatch-and-grab operations overseas, targeting newspaper publishers, businessmen, booksellers, and dissidents. Youve heard about Americas extraordinary rendition of terrorist suspects. Well, this is Chinas version.

I called Whitneys parents, but they knew nothing. I asked friends, senior officials in the Communist Party hierarchy who owed their positions to her. None were willing to intercede on her behalf. People were so worried about being ensnared by Whitneys case and so afraid of the Partys Central Commission for Discipline Inspection, which Ive concluded is the organization that is holding Whitney, that they were unwilling to lend a hand.

The more I asked around, the more I realized that every relationship formed among those who work within the Party system in China is saturated by calculations of benefit and loss. Whitney had been extraordinarily useful to her friends. Shed arranged for promotions for scores of people inside the Chinese Communist Party and the government. Shed managed their careers and spent countless hours strategizing with them about the next move. But now that she was in danger, theyd dropped her like a stone.

As I thought frantically about what to do, what clever approach would deliver back to my son the mother whod gone missing and the ex-wife whod had such a transformative effect on my life, I reflected on the years-long series of incredible events that had led to this.

When Whitney disappeared, her net worth vastly exceeded what either of us might have imagined back in the early days of our relationship. A woman of outsize talents in a patriarchal society, shed played the roulette-like political environment of the New China with unparalleled skill, parlaying an alliance with the family of a political titan into almost unimaginable success. Until she didnt. Shed understood the real China, until she didnt. I was her business partner and husband. We scaled the heights together. This is my story, and hers.

CHAPTER ONE

FROM MY BACKGROUND, THERE WAS little reason to believe that Id find myself at the nexus of economic and political power in China at the turn of the twenty-first century. I wasnt born into the red aristocracythe offspring of the leaders of the elite group of Communists who seized power in China in 1949. Far from it. My personality also didnt seem suited for the role.

I was born in Shanghai in November 1968 into a family split between those whod been persecuted after Chinas Communists came to power and those who hadnt. According to Communist doctrine, my fathers side belonged to one of the five black categories: landlord, rich peasant, counterrevolutionary, bad element, and rightist. Before the Communist revolution of 1949, my ancestors were landlords. They were doubly damned if you factor in the additional charge of having relatives overseas. Anywhere else in the world these would be marks of distinction, but in China of the 1950s and 1960s, economic success and international connections meant you were, as the Communists said, born rats. The familys lowly status prevented my dad from attending better schools and saddled him with a grudge against the world that hed carry all his life.

My fathers people were landowning gentry from Suzhou, a small city in the Yangtze River delta known as the Venice of China thanks to its luxurious gardens and picturesque canals. Family legend has it that as Communist forces advanced in 1949 in their civil war against the Nationalist Army of Chiang Kai-shek, the Shum clan dumped its valuables down a well on the family compound. That land was subsequently expropriated by the Communist government and today is the site of a state-owned hospital. At a reunion years ago, an elderly relative gave me a very specific location and tried to convince me to dig up the family treasure. Seeing as Chinas government considers everything under the earth to be state property, I demurred.

My grandfather on my fathers side was a prominent lawyer in Shanghai before the revolution. As the Communists tightened their grip on the nation, he, like many of the well-off, had a chance to flee. But my grandfather balked at the prospect of becoming a lowly refugee. To him, Hong Kong, a favored destination for migrants from Shanghai, could never compare with his home city, then known as the Paris of the East. Buying into Communist propaganda that the Party would partner with members of the capitalist class to build the New China, he decided to stay.