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Chinese Official Flees

Gao Yan, a Central Committee member and a top executive at a huge power company, was the target of a corruption probe, sources say.

October 17, 2002|Henry Chu | Times Staff Writer

BEIJING -- A member of China's powerful Central Committee, the heart of the ruling Communist Party, has fled the country to escape a corruption probe, sources said Wednesday.

Gao Yan, general manager of China's State Power Corp., left the country last month as authorities investigated him on suspicion of possible economic misdeeds, a source familiar with the investigation said.

Gao's destination was not clear, but the Hong Kong-based South China Morning Post reported Wednesday that he had made his way to a Western country.

His flight is a potential embarrassment for the Beijing government, which is striving to appear united and unblemished as it gears up for a crucial party gathering next month that could see a major transfer of power to a new generation of leaders.

Rumors of an investigation into Gao have circulated for weeks, triggering a sharp drop in the value of his company's stock. Executives at State Power were so alarmed by the plunge that they called an emergency news conference last week to assert that the company was doing fine.

Despite their assurances, however, it is an open secret in China that State Power -- which enjoys a near-monopoly on the power industry here -- has been the subject of an ongoing corruption probe for at least two years.

The investigation is a sensitive issue both politically and economically. The company is closely linked to the country's No. 2 leader, Li Peng, a onetime minister for power whose family members maintain stakes and even high-ranking positions in the industry.

At the same time, economic reformers within the Chinese government have set their sights on busting State Power's lucrative monopoly on power generation and distribution in China, a stranglehold that has turned it into one of the richest companies in the world, with assets worth $153 billion at the end of 2000.

Gao, 60, the company's former chairman and currently its general manager, has not been seen in public since Aug. 29, the 21st Century Business Herald -- one of China's more daring media outlets -- reported earlier this week.

Before being picked to head State Power in 1998, Gao, an engineer by training, racked up experience and political points as the governor of Jilin province and the party boss of Yunnan province. Since 1992, he has sat on the party's powerful Central Committee, an elite body composed of China's top 200 cadres.

It was unclear whether the investigation into Gao's dealings centered on his tenure at State Power or in his previous posts.

Whatever the case, targeting him represents something of a risky proposition for the Communist regime, given his high political profile. On the one hand, it is eager to be seen as cracking down on corruption, the No. 1 public grievance in China. Yet it has also been careful not to let investigations reach too far up the ladder lest top leaders find themselves discredited as well.

There was speculation that the probe into Gao, and State Power in general, forms part of the wider political machinations going on behind the scenes in China in advance of next month's party congress. The continuing crackdown on State Power has been interpreted by some analysts as an indirect way by his rivals of going after Li, a hard-line leader widely reviled for his key role in the 1989 Tiananmen Square massacre.

Late last year, a securities magazine all but accused Li's wife and his son, Li Xiaopeng, who heads one of State Power's subsidiaries, of using their political connections for commercial gain in the power industry. The magazine was forced to run a lengthy apology days later.

Li is expected to relinquish his position in the Communist Party hierarchy at next month's gathering, along with President Jiang Zemin, who is expected to step down from his post as the party's general secretary.

The Central Committee is also due for considerable turnover.

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