Hu’s backing is very important since Shenzhen top leadership has been in disarray with one economic official sentenced to death after being convicted on corruption charges and the mayor, thrown out of office and is awaiting trial.
Deng Xiaoping chose what was once a small fishing village as mainland China’s first SEZ. His goal was to open up the country to capitalism after the disasters of Communism and the Cultural Revolution.
Since 1980, it has welcomed foreign investors and has evolved into a partially free market, offering tax breaks and cutting red tape. Many businesses from Hong Kong were among the first to move their factories to the city.
By the 1990s, many multinational companies had also set up shop in the city, now a metropolis of some 14 million people, and China’s economic engine.
However, since those early days, labour disputes have multiplied as workers went on strike for better salaries. Today the city has lost some of its competitive edge. Many Hong Kong investors have left the city for other Asian countries or other parts of China where they can exploit very cheap labour.
Yet, Shenzhen’s Achilles’ heel is corruption. On 18 August, the city’s mayor, Xu Zongheng, was removed from office and expelled from the Communist Party, setting the stage for a trial on corruption charges. This came after the party’ disciplinary committee stripped him of his functions because “of serious violations of discipline and law.”
Xu, 55, became mayor of China’s industrial and technological hub in 2005. Whilst in office, he led a “corrupt” lifestyle and took advantage of his position to benefit others in exchange for large sums of money. All his ill-gotten gains were seized, and last year, he was stripped of his seat in the People’s National Congress.
Xu’s career came crashing down in April 2009 when a political aide, Chen Shaoji, was arrested for corruption. Last July, Chen was convicted and was given a suspended death sentence.