Victor Shih

Chongqing communist party boss Bo Xilia might have been sacked from his post as provincial leader, earlier today, but that does not mean the big shot is finished, explains political and financial analyst Victor Shiin Bloomberg.


Shih is author of “Factions and Finance in China: Elite Conflict and Inflation” and has researched borrowing by about 8,000 local government entities in the nation. Bo was replaced by Zhang Dejiang, state news agency Xinhua reported today.

“This series of events, starting from the walkabout of Wang Lijun and leading up to today is the strongest indication of elite tension we have seen since the arrest of Chen Liangyu.”

Wang was an aide to Bo who is under investigation over spending a night at the U.S. consulate in Chengdu. Chen was fired as Shanghai Communist party chief in 2006 and later imprisoned for corruption.

“I emphasize that the way the party seems to be dealing with Bo Xilai is a much milder way than the way that Chen Liangyu was treated, so far.”

“You will hear other people say he’s finished. I’m not willing to say so at this point.”

“I don’t think it is by any means the end of his political future. Deng Xiaoping made numerous comebacks after even more serious setbacks.”…

“Zhang Dejiang and Bo Xilai both enjoyed a considerable amount of patronage from Jiang Zemin. If you believe that they are not necessarily in the same faction, but in the same kind of tendency in the party, then Zhang Dejiang would be a lot less likely to clean house in Chongqing than someone from the Youth League who wouldn’t have had those historical ties with Bo Xilai.”

“People typically identified with the Youth League include Hu Jintao and Li Keqiang.” Hu is president of China and leader of the Communist party, and Li is a vice premier.

“This strongly indicates there are major disagreements on how to interpret the events in Chengdu last month. The consensus is a compromise for now at least.”

More in Bloomberg.

Victor Shih is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

More on Victor Shih and China’s debts on Storify.

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