Top real estate company executives are under investigation and detained. Beijing is using news media to highlight its house cleaning success and the corruption of the "Shanghai Gang". An entire system of power comes under fire.

Shanghai (AsiaNews/Agencies) – The corruption probe among top Shanghai Communist leaders now includes major real estate companies. The inquiry is sweeping away the city's party brass and revealing how twisted the Communist Party's power system is.

A taskforce set up by the Central Commission for Discipline Inspection and headed by commission deputy secretary He Yong has already detained three executives from top property companies for questioning. And more than ten leading real estate developers have been ordered to "assist the investigation".

The taskforce is expected to find out that many building permits were illegally granted. Its focus is expected to fall on government-backed developers such as the New Huangpu Group, which controls Shanghai-listed New Huangpu Real Estate, a company involved in a number of construction projects related to Shanghai's hosting of the World Expo in 2010. Company head Wu Minglie, a close business ally of ousted Shanghai party boss Chen Liangyu, was detained for allegedly receiving money from the city's pension funds. Mr Wu has been expelled from the Shanghai People's Congress.

Since the media is playing a key role in the affair, it is clear that Beijing is using it to go beyond informing the public about the worst corruption case in decades but also as a way to crush the "Shanghai Gang", loyal to former President Jiang Zemin, ahead of next year's party congress.

And in trumpeting its determination to crack down on corruption, the central government is showing that is against bad governance—a major source of unrest and protests. For instance, state media last Wednesday reported that two high-ranking party officials in Henan province were disciplined for authorising the seizure of nearly 1,000 hectares of farmland.

Two days ago Prime Minister Wen Jiabao insisted on the need to fight corruption and build an honest society. As proof the central government has sent more than 100 officials from Beijing to investigate the pension fund abuse case in the past two months, which culminated in the sacking of Shanghai party boss Chen Liangyu last week and the detention of a string of officials including Mr Chen's former secretary Qin Yu. Other officials who were dismissed include Shanghai Economic Commission Director Xu Jianguo, Shanghai No 1 Intermediate Court Judge Bao Xianming and Shanghai Maritime Court Vice-Head Shen Mantang.

Three directors of Shanghai Electric, the city's seventh-largest company by revenue, are under investigation in the case. They are Chairman Wang Chengming, Executive Director Han Guozhang and Non-Executive Director Zhang Rongkun.

Mr Zhang, ranked China's 16th richest person, is also head of Fuxi Investment Co, which used a loan from the pension fund to invest in a highway project.

Experts point out that if party bosses are under scrutiny, so is the whole system of power that places too much power in party leaders without any direct citizens' input.

Still, Shanghai authorities are proposing to build 27 million square metres of housing this year and 26 million square metres next year—100 million by 2010—in order to stem real estate speculation and rising prices. This way they can increase the per capita living space in the city from the present 15.5 square metres.

Central authorities in May had ordered Shanghai to come up with a blueprint that would discourage building luxury homes but instead require that about 70 per cent of all the new housing built would include apartments of up to 90 square metres. Similarly, Shanghai is to instruct developers to build more housing for the rental market rather than property.

In the meantime, the anti-corruption drive is expected to widen the probe to areas such as the housing deposit and health insurance funds. (PB)

• china
• shanghai
• corruption
• probe
• real
• estate
• speculation