Sunday, November 30, 2008

Arrest of Billionaire in China

The founder of Gome, a well known Chinese electronics company, has been arrested.

From the BBC :

Police have confirmed that one of China's richest men, Huang Guangyu, is being held in custody while they investigate him for "economic crimes".

Mr Huang went missing last week and shares in his company Gome have been suspended from trading.

Officials gave no further details, but Chinese media point to alleged irregularities in the share price of a company controlled by his brother.

The billionaire electrical appliance tycoon is worth some $6bn (£4bn)

It is inevitable that the new wealth in China will begin to challenge the authority of the state and the military apparatus. History shows that whenever a new economic class develops, it seeks to gain political power. Consider, as an example, the bourgeoisie in pre-Revolutionary France.

I have no idea if Huang was trying to undermine the Communist Party on some level, but I would not be surprised. A state crackdown on the budding oligarchy would not be surprising.

Based upon conversations I've had , I think the status of the Chinese military has been reduced over the last decade. I wonder whether the old guard is happy about that.

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