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Chinese President's war on corruption finds its way to Brighton

By John Garnaut and Philip Wen
Updated

President Xi Jinping's "You Die, I Live" war against corruption seems a long way from the beachside cul-de-sacs of Brighton. But it has come right to the doorstep of Zheng Jiefu, an Australian resident property developer, who has been trapped in a mafia-style shakedown involving China's former deputy spy chief and the country's most wanted man.

Mr Zheng's quandary is that he doesn't know whether the Mitsubishi four-wheel-drive that parked in front of his mansion last Wednesday night, and tailed him around Melbourne's bayside suburbs for two hours, was working for President Xi's corruption fighters or against them.

Living in terror: Zheng Jiefu says he is being followed.

Living in terror: Zheng Jiefu says he is being followed.Credit: Joe Armao

If that car, and others like it on previous nights, had been sent by Mr Xi's team, then calling the police would invite a diplomatic incident and jeopardise his aspirations to start again in China.

"They were waiting at my door. They followed me to the beach, but I didn't want to call the Australian police because I didn't know who sent them," says Mr Zheng, after arranging to meet outside the Louis Vuitton shop at Crown Casino.

The note that was scrunched into Zheng's Brighton letter box earlier last month.

The note that was scrunched into Zheng's Brighton letter box earlier last month.Credit: A

If, however, that vehicle was sent by the other side, he says, then "I am in great danger".

Mr Zheng's personal dilemma mirrors a national one as the Abbott government grapples with the objectives, methods and identities of Mr Xi's agents of persuasion.

Australia is routinely cited in Chinese state media as one of the three biggest targets of Mr Xi's "Operation Fox Hunt" and freshly launched "Sky Net" campaigns to bring fugitives back home, along with Canada and the United States.

To the frustration of Beijing, however, Canberra has been deafeningly silent on the issue since October when the Australian Federal Police told Fairfax that it was helping with a jointly agreed "priority list" of economic fugitives, together with tainted assets worth hundreds of millions of dollars.

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War against corruption: Chinese President Xi Jinping.

War against corruption: Chinese President Xi Jinping.

Australia's co-operation has been "well short of what we expected", says Zhuang Deshui, deputy director of Peking University's Clean Government Centre. "I feel Australia is not fully open towards China with its information.

"We should separate anti-corruption from human rights."

Last month, as Beijing chided Canberra over its squeamishness over capital punishment and judicial process, the Communist Party's main "discipline" body revealed it had sent 61 agents abroad to China's network of embassies to "persuade" fugitives to return.

There are many in Australian government agencies and ethnic Chinese communities who are wondering what sort of agents and persuasion Beijing has in mind.

Mr Zheng, a property developer with assets worth about $40 million in Australia, has been keeping a low profile since he visited Melbourne to attend a daughter's graduation in 2008 and decided not to return. That was the year, Mr Zheng alleges, that a shrewd and ruthless businessman, Guo Wengui, teamed up with a powerful official, Ma Jian, to appropriate his Tianjin Bohai Circle conglomerate, valued then at more than $2billion.

Until that point, Mr Zheng had courted publicity, such as when he towed an old aircraft carrier, The Kiev, from the Soviet Union to Tianjin, where it is now the centrepiece of a military museum.

But since then, Mr Zheng says, Mr Guo and Mr Ma have heavied all of his important relationships, destroyed his marriage, threatened his children and, at one stage, turned up with six Reservoir Dogs-style henchmen in sunglasses and black coats.

So he has been watching his empire being dismembered from the relative tranquility of Brighton.

"Ma and Guo combined were the perfect marriage of state and economics," says Mr Zheng. "In China they simply tell you if you don't hand over your business they'll throw you and all your people in jail."

All of that, unfortunately, is not so unusual. What is different about Mr Zheng's case is that the official he says was working against him, Mr Ma, was China's counter-espionage chief and he has just been spectacularly brought down on corruption charges.

Chinese media, netizens and victims have delighted in the opportunity to expose how Mr Ma allegedly worked with Mr Guo – known as his "mazai", or henchman – to amass real estate, mistresses and illegitimate children. Mr Zheng is pleased to know that Mr Guo has allegedly fled to the US.

Mr Guo has told Hong Kong's South China Morning Post he is in New York to treat a leg injury. He has denied claims of colluding with Mr Ma and says he will return to China to clear his name.

Mr Guo, who has been said to boast that the Communist Party "listens to his commands", has in recent weeks allegedly kept up a flurry of lurid attacks, providing a rare window into how Mr Xi's anti-corruption crusade has led to political cliques competing to see who has the more influential backer.

"You will die in prison," read a text message purportedly from Mr Guo, posted online by executives of China's largest securities brokerage, Founder Securities, which Mr Guo and the deputy spy chief, Mr Ma, had previously attacked. "You don't need me to kill you, but I will let you beg me for death, and I will rip your families apart. Happy with that?"

Such mafia-state posturing explains why Mr Zheng was not comforted to hear that the 4WD outside his home had not been sent by corruption-fighters in Beijing. "If we send someone to Australia we will do so officially," said a police contact in China, when he called at 1.31am on Thursday.

Mr Guo's purported online threats to Founder Securities were similar to the ones Mr Zheng has been receiving by phone, text message and mail encouraging him not to return to China and give evidence against the alleged six-year shakedown of his business empire by Mr Guo and Mr Ma.

One note, which was scrunched into his letterbox on March 10 reads: "Old Zheng, Returning home is fine. Let's meet in China. You know the price if you tell tales when you are back ... The lives of your whole family are in our hands. Take care, you understand."

The past six years have been "utterly filled with terror", Mr Zheng says, detailing the reach of Mr Ma and Mr Guo's official and unofficial mazai networks in Australia.

Mr Zheng would like to return to China to help President Xi – "a hero of the age" – by testifying against Mr Ma and Mr Guo on matters that go to the heart of Mr Xi's high-stakes battle for personal domination and China's future.

He says he has information, for example, about the relationship between Mr Guo's son and the son of another senior fallen official who was killed in a mysterious Ferrari accident involving two semi-clad women on Beijing's northern ring road.

But first he needs some high-level safety guarantees.

Canberra has been equally cautious about ratifying an extradition treaty and providing assistance with individual cases.

Concerns about natural justice and the death penalty are being weighed against the imperatives of co-operating with an economic superpower under the leadership of a powerful and apparently popular corruption-fighter.

Like Mr Zheng, Australian officials have to find a way to sort the clean officials of Mr Xi's new regime from the mobsters of the old, whom he's trying to destroy.

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Original URL: https://www.theage.com.au/link/follow-20170101-1merr5