Bloomberg: Token Dissent Plummets in China as Comrade Xi's Power Grows

NYU Law Professor and USALI Director Jerome A. Cohen was quoted in this Bloomberg article. 

"China’s parliament -- never known for its independence -- saw dissenting votes sink to their lowest level in more than a decade as President Xi Jinping demands greater loyalty ahead of a crucial party reshuffle.

Only 14 of the 2,838 lawmakers who turned up Wednesday for the closing session of the National People’s Congress voted against approving the annual report on the government’s performance and targets for the coming year. That compares with the 101 dissenting votes cast in 2013, the final report presented under Xi’s predecessor, Hu Jintao. 

Other reports introduced by the supreme court, state prosecutors and the legislature all received fewer “no” votes than at any point since at least 2006. Earlier data was only sporadically available in Chinese media reports, which failed to provide a breakdown of votes in some years.

The results show how successfully Xi has curtailed public dissent as he prepares for a Communist Party gathering later this year to reshuffle much of the country’s top leadership. Xi has sought to avoid any drama before the twice-a-decade event as he seeks to win backing for his economic reform plans and secure lasting political influence.

“Since Xi Jinping’s ascendance and particularly today, it is clear that the party has brought the legislature to heel,” said Jerome Cohen, a New York University School of Law professor who has been studying China’s legal system since the 1960s. “The annual voting records provide an unusually clear symbol of what has taken place politically, just as the numbers in environmental smog reports clearly delineate increasing pollution.”"

To read the entire article, click here. 

Visit from Former President Ma Featured on NYU Law News

In his second trip to the United States since stepping down as president of Taiwan in May 2016, Ma Ying-jeou LLM ’76 visited NYU Law and spoke with Professor of Law Jerome Cohen, holding forth on topics including the dispute over the Diaoyu Islands and the challenges of bipartisanship in Taiwan. Co-sponsored by the Asia Law Society and the U.S.-Asia Law Institute, the event was very popular and featured a dynamic discussion.

Read about the event here.

Associated Scholar Yu-Jie Chen and Margaret Lewis Featured in ChinaFile


December 5, 2016

On Friday, Donald Trump shocked the China-watching world when news broke that he had spoken on the phone to Taiwan President Tsai Ing-wen. The call was remarkable not for its content—Tsai’s office said she told Trump she hoped the United States “would continue to support more opportunities for Taiwan to participate in international issues.” Rather, it was the way in which the call, by implicitly recognizing Tsai as a head of state, seemed to presage a radically different Taiwan policy. Is this beneficial for U.S. interests, for Taiwan, and for global stability? —The Editors

Yu-Jie Chen

Much of the American and international commentary on U.S. President-elect Donald Trump’s call with Taiwan’s President Tsai Ing-wen has focused on whether it was a strategic move or a foolish gaffe and its potential repercussions for U.S.-China relations.

It is crucial to understand not just the perspectives of Washington and Beijing but also that of Taipei. To begin with, although de jure independence would be desirable to many in the Republic of China on Taiwan, which already enjoys de facto independence, the Taiwan government is not seeking to declare independence for the obvious reason—the near certainty that Beijing would fire missiles against the island. Many Taiwanese are pragmatic in thinking about their country’s future and do not favor provoking a war. This point seems to be lost, however, on some Western media commentators who unnecessarily caution America not to recognize Taiwan as an independent state.

What Taipei seeks, at least in the foreseeable future, is to deepen its relations with the U.S. (and with other states and international organizations generally) in a functional, meaningful way. This is a reasonable, and in fact modest, goal. Contact between Taiwan’s democratically elected leaders and their counterparts in countries that do not have diplomatic ties with Taiwan has long been severely suppressed as a result of Beijing’s pressures. Taiwan’s leaders have to maneuver even for brief “transit” stops in the U.S. to conduct very limited direct exchanges with merely a few Congressmen and analysts.

Yet, effective exchanges between Taipei and other states and international organizations are important not only to Taipei but also to those that want to cooperate with Taiwan in political, economic, social, and cultural realms. The U.S., while not formally recognizing Taiwan, must find ways to conduct regular, high-level discussion with the Taiwan government for their mutual benefit. Such practice is not without precedent. From 1955 to 1970, Washington and Beijing held a series of ambassadorial-level talks in Geneva and Warsaw regarding the repatriation of nationals even though the two sides then had no diplomatic relations. (I thank Jerome A. Cohen for this point.)

Similar innovative efforts should be considered with regard to Taiwan. For example, the proposed Taiwan Travel Act introduced in the U.S. House of Representatives last September rightly points out that it should be the U.S. policy 1. to permit high-level Taiwanese officials to enter the U.S. and to meet with U.S. officials and 2. to permit the Taipei Economic and Cultural Representative Office—Taiwan’s de facto embassy—to conduct official business in the U.S. More support is needed, as a similar bill in 2013 failed. In an encouraging step, the U.S. House on Friday passed a bill that for the first time authorizes senior U.S.-Taiwan military exchanges.

More broadly, Taiwan, with its vibrant civil society, has much to contribute to global governance in an increasingly interconnected world. However, Taiwan’s outreach has long been hampered by China’s campaigns to pressure other countries and international organizations not to allow Taiwan’s participation. Examples abound. Just last month, the International Criminal Police Organization (Interpol) rejected Taiwan’s first application in 32 years to attend Interpol’s annual meeting as an observer, although Taiwan can and should play a significant role in the global fight against transnational crime with its able law enforcement forces and advanced information technology. A few weeks later, a Taiwanese NGO dedicated to the research of rare diseases, which had been invited to take part in a U.N.-affiliated meeting, was not even permitted to enter the U.N. building.

One positive thing that might come out of the fuss over the Trump-Tsai call would be much greater public attention to the predicament confronted by Taiwan and to the urgency of updating U.S. policy to expand communication with Taiwan and, more broadly, expanding Taiwan’s well-deserved participation in global affairs.

Margaret Lewis

o not know if Mr. Trump has read Analects, but if Confucius had a Twitter account, he might caution the president-elect that “Going too far is as bad as not going far enough” (過猶不及, guòyóubùjí). “Recalibrate,” as used in the prompt for this ChinaFile conversation, suggests a careful adjustment, not a rash, radical departure from current practice. While the start of a new administration is a fitting time to reassess the status quo of U.S. policy towards Taiwan, the perils of impetuous action far outweigh any potential benefits of hastily shaking things up.

I join Ms. Chen, above, in welcoming the U.S. government to consider “innovative efforts” with respect to policy towards Taiwan. But any such creative efforts require space to incubate and would be undermined, if not demolished, by a Twitter-based foreign policy.

A thoughtful recalibration of U.S. policy requires not only time but also people who are knowledgeable about Taiwan. One consequence of China’s opening to the world has been that many younger American scholars obtain language training in the mainland instead of Taiwan (myself among them). This has tremendous benefits in terms of American understanding of the People’s Republic of China; it has, however, diverted American students from Taiwan. This is a mistake. The most knowledgeable American experts on Taiwan come from the generation that often spent significant time living in Taiwan as they honed their language skills.

The flurry of interest in Taiwan over the past few days has brought into sharp relief how necessary it is for the U.S. to maintain a deep bench of Taiwan experts. Hopefully a silver lining of the kerfuffle over “The Call” (and here’s hoping that history will prove this episode to be a mere passing fuss) will be a renewed interest in academic exchanges and research projects involving Taiwan.

Read the entire article and all expert commentary here.

Associated Scholar Aaron Halegua Quoted in Bloomberg Article

The Chinese government doesn’t want labor groups organizing workers to fight for their rights.

Dexter Roberts

November 10, 2016 — 5:00 PM EST

Hong Kong activists calling for the the release of Meng Han. Source: China Labour Bulletin

Panyu, a district spotted with factories and half-finished real estate developments, is largely indistinguishable from the rest of the Pearl River Delta, China’s biggest export manufacturing hub. Until recently, though, it was recognized widely by China’s migrant workers as the home of the country’s most active independent labor rights group, the Panyu Migrant Workers’ Center, which has helped thousands of workers in their disputes with factory managers.

On Nov. 3 in the Panyu District People’s Court, China’s authorities took the latest step in crippling the growing labor movement. Meng Han, a former hospital guard turned activist at the Panyu Center, pleaded guilty to disturbing public order by inciting workers to strike. He was sentenced to 21 months in prison. Meng, who many had thought would dispute the charges, faced sleep deprivation and harsh interrogation at first, during the almost 12 months he’s been held already, says Han Dongfang, founder of the Hong Kong-based China Labour Bulletin, a workers’ advocacy organization. Meng’s parents had to move from their apartment after unidentified thugs defaced their door with axes, Han says.

Three of Meng’s colleagues at the Panyu Center, including director Zeng Feiyang, pleaded guilty to similar charges in September and were given deferred sentences. Zeng, who’s married, was also accused in state media of having at least eight girlfriends and sending sex videos to others. “They are trying to intimidate us,” says Zhang Zhiru, who heads the Shenzhen-based Chunfeng Labor Dispute Service Center.


Scaring labor activists into submission is part of the leadership’s strategy to tame unruly migrant workers. Increasingly educated and internet-savvy, these workers have taken to the streets over unpaid wages and social welfare benefits, as well as unsafe work conditions. The government is also working to supplant independent labor groups by reinvigorating the more than 200 million-strong All-China Federation of Trade Unions (ACFTU), the only state-approved umbrella union. “The Communist Party is trying to get rid of the existing activists that have established social networks and destroy their legitimacy,” says Wang Kan, an expert on Chinese labor activism and a professor at the China Institute of Industrial Relations in Beijing. “They want to get rid of the troublemakers and buy themselves some time” while they reform the official union.

The labor groups have already faced harassment, particularly since President Xi Jinping took office in 2013. Zhang of the Chunfeng Labor Dispute Service Center has had to move his office more than a dozen times since police ordered landlords not to rent to his organization.

Late last year, security officials cracked down on the 110 or so labor rights groups operating in China, focusing on Guangdong province, where about half of them are based. Police interrogated at least 20 individuals who promoted labor rights and detained seven. While three were released, Meng and his colleagues were charged and convicted. “The government doesn’t want workers to organize,” says Duan Yi, a Shenzhen-based labor lawyer whose firm has represented workers involved in more than 100 strikes. The labor environment has become “very, very sensitive.” Duan met a reporter in a coffee shop, saying an interview in his office would draw unwanted attention.

Labor groups including the Panyu Center have been accused in Chinese state media of being manipulated from abroad—often meaning from Hong Kong. “We must earnestly and painstakingly ensure the stability of the trade unions and watch out for infiltration,” Shanghai Federation of Trade Unions head Hong Hao told the state-backed news website in July.


On Jan. 1, a new law will make it much harder for Chinese nongovernmental organizations to take money from or work with organizations overseas. Chinese workers’ groups have long had a close association with Hong Kong-based activists, one reason they are suspected by officials. The labor groups played an historic role supporting the Communist Party against the Nationalists in China’s civil war. Officials worry that another party will gain strength by allying itself with worker groups, says Jane Liu, China program manager at Social Accountability International. Beijing has its hands full in Hong Kong, where it won’t allow two elected, pro-independence members of the Legislative Council to be sworn in.

Founded in 1925 as a “transmission belt” (to quote Lenin) to send worker concerns up to the party and party orders down to the factory, the ACFTU has become little more than a social association, holding the annual company Chinese New Year parties and organizing basketball tournaments for workers. When labor disputes arise, the ACFTU is often viewed by labor as siding with management over workers. “Most of what they focus on has nothing to do with what we would think a union does. They have lost their roots,” says Sheila Wong, deputy director of the Guangzhou-based Inno Community Development Organisation, which is helping a local branch of the ACFTU install a worker grievance hotline.

At a top-level meeting in July 2015 on the work of China’s three largest mass organizations—the Communist Youth League, the All-China Women’s Federation, and the ACFTU—Xi harshly criticized the union for not properly carrying out its job, says Wang of the Institute of Industrial Relations. Mass organizations must avoid “being alienated from the people,” the official Xinhua News Agency reported Xi as saying. “They are caught in a very tough place,” says Aaron Halegua, a lawyer and research fellow at New York University’s U.S.-Asia Law Institute who recently wrote about the legal representation of Chinese workers. “On the one hand, the union is supposed to represent workers, but that must be done without actually empowering workers.”

Read the entire article here. 

Associated Scholar Aaron Halegua Quoted in TakePart

Rebecca McCray, "China's Growing Labor Movement Threatens Beijing," TakePart, March 16, 2016 (quoting Aaron Halegua on the reasons for the rise in strikes and labor unrest in China, including the economic downturn, increased worker consciousness, and the lack of an effective trade union or other means of negotiating between workers and management). 

"Government-Sponsored Legal Aid and the Role of Labor NGOs in China: A Story of Displacement?", The Global Transformation of Work: Market Integration, China's Rise, and Labor Adaptation, Rutgers University (March 17, 2016).

Why Prostitutes and Not Pimps?

The following comment by Professor Jerome A. Cohen appeared in the New York Times "Room for Debate" web-feature on July 31, 2010. Professor Cohen was one of several scholars to comment upon China's recent ban on public shaming of criminal suspects.

Some years ago, I went to the city of Fushun in northeast China to meet the deputy mayor in an effort to settle a dispute that started with a Chinese company's fraud against its American joint venture partner. I was prepared to report the case to the police and prosecutors if necessary but could hardly be confident whether I would be taken seriously.

As I approached Fushun by taxi, I was passed by a long parade of open trucks that interested me more than it did the roadside pedestrians who took little note. In the open part of each truck stood three hapless Chinese, each held by the scruff of the neck by a uniformed policeman and each wearing a large sign with the name "Economic Criminal."

It was not clear where they were going or had come from. Were they en route to a public accusation, a mass trial or sentencing or even a mass execution? Or was this vehicle parade, held during one of China's periodic "strike hard" campaigns against crime, simply a public deterrent against further misconduct?

I told the mayor, who was responsible for supervising the defrauding company, how happy I was to see that economic crime was being vigorously suppressed. He got the point and settled amicably.

Every government "shames." The questions are always: how, for what purposes and with what effects? Some government actions are designed to shame, but shame is often a byproduct of other actions that serve less controversial purposes.

The Chinese people continue to be troubled by crime and need effective police protection. Yet their increasingly educated and "rights conscious" society increasingly condemns police arrogance, brutality and errors. Memories of the public humiliation, torture, suicide and killing of the Cultural Revolution are still in the minds of mature citizens, and the Internet and, occasionally, investigative journalists reveal and ridicule today's law enforcement scandals.

Ordinary Chinese who formerly had no voice are beginning to express a strong desire for equality, fairness and justice and for recognition of individual dignity in daily life. They now ask: Why are alleged prostitutes paraded before they are convicted? What about their patrons and pimps and the corrupt police who will let them work again as soon as the "strike hard" campaign is over?

Will this latest attempt by the central government to stop this form of "shaming" succeed? Those who understand China's government have a saying: "The center has its policies. The locality has its ways of evading them."

A Scholar's Insight Into China's Budding Legal System

This article was published in the New York Times on July 28, 2010 under the title, "A Scholar’s Insight Into China’s Budding Legal System."

Author: Richard Bernstein

NEW YORK — It was the early 1970s, and Jerome A. Cohen, at the time a specialist on China at Harvard Law School, was having dinner with Prime Minister Zhou Enlai in Beijing.

“I told Zhou, ‘You should put somebody on the International Court of Justice,”’ Mr. Cohen recalled. “Well, he and the other Chinese officials at the dinner laughed uproariously. They thought I was Jack Benny. Why would Communist China want to put somebody on a court where they’d be outvoted by all those capitalist judges?

“But they’ve done it,” Mr. Cohen said, illustrating one of the things that seems normal in China today but that was almost unthinkable when China’s opening to the world was brand new. “They’ve staffed all international organizations with excellent legal talent.”

Mr. Cohen, who essentially created the U.S. study of law in the People’s Republic of China, has been following developments in Chinese law for roughly half a century, lately as professor of law at New York University and as a frequent commentator on various legal and human rights cases in China.

It’s fair to say that when Mr. Cohen got started, the U.S. study of modern Chinese law didn’t exist, and neither really did law in China. And so, he’s had a privileged view of a remarkable development, the creation virtually from scratch of the entire Chinese legal system.

Mr. Cohen recently celebrated his 80th birthday, which seemed a good time to ask him to assess how China has done over the years.

Most people who follow the frequent accounts of human rights violations in China would answer that China hasn’t done very well, and when it comes to human rights, Mr. Cohen largely agrees. In the last few years he has become a major source of information about human rights, or their absence, in China, his specialty being the instances where China fails to observe its own law.

Only last week Mr. Cohen published an article on the case of Xue Feng, a naturalized U.S. citizen recently sentenced to eight years in prison in China for helping his U.S. employer purchase a commercial database on Chinese oil resources — an act that the Chinese Ministry of State Security deemed to be a violation of the country’s catchall state secrets law.

Mr. Cohen’s article, published in The South China Morning Post and in Chinese in The China Times on Taiwan — both newspapers that are paid attention to inside China — listed at least half a dozen instances in which the police or prosecutors broke China’s own law in their handling of Mr. Xue’s case.

After he was seized by the Chinese police in November 2007, for example, Mr. Xue was held incommunicado for months in a secret prison. He was tortured. He didn’t have access to legal counsel for about a year. And his trial was closed not only to the public but to Mr. Xue’s family — all in blatant violation of China’s own Criminal Procedure Law.

In addition, the U.S. Consulate wasn’t informed of the arrest of Mr. Xue for 32 days, rather than the four days provided for in the two countries’ consular agreement.

But while Mr. Cohen has the expertise to point out these violations and to publicize them, he takes a moderate and balanced view of the overall picture, seeing some promise in the creation of an entire legal culture that simply didn’t exist before.

“There are now some 200,000 judges, close to 180,000 prosecutors, roughly 170,000 lawyers, and thousands of law professors, as well as tens of thousands of people with legal training who staff local, regional and central government agencies and most large enterprises,” Mr. Cohen said. “And while they have different viewpoints, they all do have an interest in promoting a legal system that’s blatantly inadequate in some respects, but does well in others.”

Over the years, Mr. Cohen has met with members of numerous legal delegations organized by the Chinese Supreme Court that have visited the United States, including one soon to arrive to study punishment policies — “because they want to improve, and they know they are under enormous criticism abroad because of their death sentence policy.”

“Last year a delegation came to study exclusion of illegally obtained evidence, an effort to stop coerced confessions and torture,” Mr. Cohen said, pointing out that last month China published new rules trying to ensure that coerced confessions wouldn’t be admitted in courts.

“But,” Mr. Cohen said, “when it comes to the most basic questions of the fundamental decencies that every government should observe toward its own citizens, this government and this party have failed to cut the mustard.”

It’s a paradox, explained in part by Mr. Cohen as an unintended consequence of China’s efforts to build a legal system, which its leaders want for the sake of credibility and legitimacy.

“They’ve done a lot to create an awareness of law and rights, and they’ve trained a series of overlapping legal elites that want to use their legal educations to help people defend those rights,” Mr. Cohen said.

But with more and more people seeing the law as a means of challenging arbitrary authority — by protesting being evicted from their homes by real estate developers, for example — the security apparatus steps in to enforce what China often calls “social stability.”

“The first reaction of the leaders is repression,” he said. “And in cases that involve state security, they’re not too fastidious about their own law.”

Mr. Cohen has what might be called the foreigners’ advantage in calling attention to China’s human rights shortcomings. He can freely write and publish, where Chinese colleagues cannot. And, while he has no doubt angered the authorities from time to time, he is clearly held in high esteem by many in the budding Chinese legal world itself.

In May this year, Tsinghua University Law School in Beijing held a conference on criminal justice and the role of defense lawyers in honor of Mr. Cohen’s 80th birthday, which would seem to be a sign of progress in itself, even if, as is often the case in China, a note of repression marred the event. At the last minute, one leading Chinese criminal defense lawyer was removed from the program by the authorities — no explanation provided.

Swede’s Crime Confession on China TV Rattles Foreign Groups

BEIJING—The detention and televised confession of political crimes by a Swedish activist in China has sent chills through communities of foreigners that engage in civic issues in the country.

Beijing’s public shaming of Peter Dahlin is a sign that China’s leaders may now be trying to muzzle international critics with the same tactics they’ve deployed against local dissidents, say activists, lawyers and academics.

In footage that was played repeatedly by state broadcaster China Central Television on Wednesday, Mr. Dahlin is shown admitting to having broken Chinese laws through a small legal-aid nonprofit he co-founded in 2009.

“I have caused harm to the Chinese government, I have hurt the feelings of the Chinese people,” Mr. Dahlin says in the video. “I apologize sincerely for this and am very sorry that this ever happened.”

State media reports accused the Swede of endangering state security—a serious crime that carries a potential life-sentence—by funding Chinese human-rights lawyers and compiling reports on China’s rights record. They also alleged that hostile foreign forces planted Mr. Dahlin in China.

In a statement on Thursday, a spokesman for Mr. Dahlin’s nonprofit, called the China Urgent Action Working Group, dismissed the allegations as baseless and suggested his confession had been coerced. The charges show “the authorities consider the promotion of human rights through public interest litigation to be a criminal activity,” said Michael Caster, the spokesman.

The Swedish Embassy in Beijing noted the media reports about Mr. Dahlin but declined to comment further. Swedish officials “continue to work intensively” on Mr. Dahlin’s detention, an embassy spokeswoman said.

China’s Foreign Ministry has said it is respecting Mr. Dahlin’s legal rights, including granting consular officials access to him.

Televised confessions are increasingly common in China, but rare for foreigners and even more so for political crimes. In 2013, Charles Xue, a Chinese-American businessman who criticized the government online, confessed on TV to soliciting prostitutes. The same year, Peter Humphrey, a British investigator involved in a business dispute, confessed on TV to illegally obtaining personal information on Chinese citizens for profit. Both men were detained and then released, Mr. Humphrey after nearly two years.


This image from Chinese TV shows Peter Dahlin, the Swedish co-founder of a nonprofit in China, confessing to political crimes that his advocates say was coerced. PHOTO: CCTV VIA AP VIDEO

Mr. Dahlin’s disappearance in early January and subsequent reappearance on television two weeks later has stoked anxiety among other foreigners working on Chinese civil society issues, including in areas previously seen as less sensitive, such as anti-discrimination.

“This is a red alert. It’s super red,” said one former country director of a foreign nonprofit in China.

The portrayal of Mr. Dahlin as an instrument of hostile foreign forces comes amid a resurgence in Maoist ideological rhetoric and heightened concern in China over the influence of foreign ideas.

Much of Beijing’s attention has focused on the influence of foreign civic groups, which Beijing fears could be trying to foment unrest of the sort that toppled regimes in the former Soviet Union and more recently in the Middle East. Foreign media coverage, textbooks and scholarship have also come under attack in state media.

Jeffrey Wasserstrom, an expert in modern Chinese history at the University of California, Irvine, said the treatment of Mr. Dahlin illustrates the growing difficulty of determining where Beijing’s political red lines are—and the harsher punishments meted out for crossing them.

“There are many cases where things that seemed relatively unproblematic to do a few years ago or even 12 months ago have gotten people into trouble,” he said. “The system has always been far from purely rational and predictable, but now it is even more so.”

One key source of concern in Mr. Dahlin’s case, some foreigners say, is state media’s depiction of reports he wrote on China’s human-rights situation as being a part of his criminal activity. CCTV said reports Mr. Dahlin sent to foreign groups were based on data he collected online and hadn’t personally witnessed, raising questions over their accuracy.

Legal experts say these were likely standard memos that are required by nearly all major nonprofit donors.

“They make it seem like it’s some sinister foreign intelligence report when in fact it’s the most natural of observations about how money is being spent to improve human rights in China.” said Jerome Cohen, a veteran China legal scholar at New York University.

The segment also showed an interview with a member of China Urgent Action Working Group identified only by his surname, Wang, who said Mr. Dahlin twisted or fabricated facts in the reports. “In fact, the aim was to create a disturbance, to wait for the right moment to try to subvert our nation’s sovereignty and the leadership of the party,” the man said. Chinese activists identified the man as Wang Qiushi, a human-rights lawyerwho was detained by police this month.

The criminalizing of negative reports about China could potentially curb the activities of not just activists, but academics, analysts, journalists and others involved in collecting and publishing information about China, legal experts said.

“One could well imagine that reports regarding health or other subjects like that which might be considered injurious, given the very broad definition China has of its national security, could also be subject to prosecution,” said Lester Ross, a lawyer with many years’ experience working in China.

Some in China have advocated using the country’s criminal laws to more aggressively counter international criticism of the country. In December, a website belonging to the Communist Youth League quoted legal scholar Zhu Wei arguing that a German citizen who had compared Mao Zedong to Hitler in a controversial YouTube video could be punished under Chinese law—even though he lives abroad.

Mr. Wasserstrom said a rising tide of official criticism might make it riskier to conduct some research in China and lead to self-censorship by younger scholars eager to maintain research access in the country.

Write to Josh Chin at

Jerome A. Cohen Featured in WSJ Article on Swedes Crime Confession on Chinese TV

Published January 21, 2016. To read the entire article please click here. 

BEIJING—The detention and televised confession of political crimes by a Swedish activist in China has sent chills through communities of foreigners that engage in civic issues in the country.

Beijing’s public shaming of Peter Dahlin is a sign that China’s leaders may now be trying to muzzle international critics with the same tactics they’ve deployed against local dissidents, say activists, lawyers and academics.


Media Coverage of Ling Li’s Research on the Judicial Corruption

Chinese vase frenzy: bribery and the auction house
As the Chinese government pays ever more attention to the country's pervasive corruption, art auctions have become the latest ruse for those giving or soliciting bribes.

By Malcolm Moore, Shanghai

12:30PM GMT 25 Mar 2011

Auction houses on the Chinese mainland are poorly-monitored, according to Li Ling, a law lecturer at Northwest University in Xian, and present a useful forum for people to pass bribes to each other.
The Chinese vase frenzy: Bribery and the auction house
The vase came from the collection of Dai Run Zhai, a Chineseman who became New York's most distinguished art dealer after moving to America in 1950

The practice helps to explain some of the hugely-inflated prices that have been paid for Chinese art in recent years, although there is no suggestion that international auctions are also being exploited by grafters.

A typical scenario would see the person who wants to be bribed putting an artwork or antique of little value up for auction. The briber then buys the agreed piece for a huge sum, according to Ms Li in a research paper, 'Performing Bribery in China.'

Sometimes, the auction house is not even required.

In one case discovered by prosecutors in the eastern city of Nanjing, a property developer bought two paintings directly from a government official. The appraised value of the paintings was 3,000 yuan (£284), but the developer paid more than 333 times as much.

The sly arrangement, and the role of the auction houses, has become the subject of a quasi-autobiographical bestseller by Hu Gang, a Chinese author and former auctioneer.

Mr Hu was convicted in 2003 for bribing three judges with 490,000 yuan in exchange for commissions to carry out auctions of court-seized property. He wrote "Celadon", a novel about a corrupt auctioneer, from his jail cell.

In the book, a protagonist called Mr Zhang bribes a judge in a remarkably circuitous way.

First Mr Zhang arranges for a tutor to teach the judge's son Chinese calligraphy. Then, he discreetly auctions the son's calligraphy at his auction house, and instructs his friend to bid for it. As the auctioneer, he then hands an envelope of cash to the judge, even subtracting the auction commission from the total.

"It can stand any investigation," Mr Zhang reassures the judge.

Mr Hu has confirmed that while the book is fiction, it is an accurate reflection of real life. The book has become wildly popular in China as a manual of how to practice the delicate, and often underhand, art of cultivating business relationships.

Jerome Cohen’s testimony to the CECC on Chen Guangcheng

The plight of Chen Guangcheng and his family continues to attract attention inside and outside China. Chen is a self-trained legal advocate who has represented farmers, the disabled, and other groups. He is perhaps best known for the attention he drew to population planning abuses, particularly forced abortions and forced sterilizations, in Linyi city, Shandong province, in 2005. In deeply flawed legal proceedings, authorities sentenced him in 2006 to four years and three months in prison for, among other things, "organizing a group of people to disturb traffic order." While imprisoned Chen was reportedly beaten by fellow inmates and denied medical treatment. Following his release in September 2010, Chen, his wife Yuan Weijing, and their six-year-old daughter have faced stifling conditions of home confinement and constant surveillance. Chen and Yuan reportedly have been beaten since being released, and until recently their daughter was denied schooling. Chen's health also remains in doubt as he suffers from a digestive disorder. Authorities have continued to employ violence to prevent the growing numbers of journalists and supporters from visiting the family. Online campaigns in support of Chen have also sprung up in China, yet the government has censored terms that relate to him or his case. Witnesses examined why the Chinese government has not permitted access to information regarding Chen Guangcheng's circumstances and well-being nor permitted visitors to see Chen. Witnesses also examined the criminal procedure violations related to Chen's current detention under an illegal form of "house arrest" and Chen's access to legal counsel.

Read Jerome Cohen's testimony here:

Professor Cohen cited in New York Times article on overturn of Wu Ying's death sentence

This article was originally published in The New York Times on April 20, 2012 under the title, “Chinese court overturns a young tycoon's death sentence."

BEIJING — The Supreme People’s Court on Friday overturned the death penalty against a 31-year-old woman who was convicted of financial fraud three years ago after becoming rich through a company that sold beauty products and other goods.

The case of the woman, Wu Ying, ignited an enormous outcry in China, especially on the Internet, and strengthened public criticism of the death penalty.

Xinhua, the state news agency, reported that the supreme court, which agreed in February to review the case, refused to approve the death sentence imposed by a lower court and said that the sentence needed to be revised by the High People’s Court of Zhejiang, a coastal province that is home to Ms. Wu and many other entrepreneurs.

Ms. Wu was sentenced to death in December 2009 by the Jinhua Intermediate People’s Court in Zhejiang for cheating investors out of $60.2 million. Ms. Wu, the founder of Bense Holding Group, raised $122 million from investors between 2005 and 2007, according to official reports.

Her supporters said she had been transparent in her business dealings and had not tried to hoodwink investors. Rather, they said, she was trying to raise money through private financing and loans. In China, private entrepreneurs can have a tough time getting financing from state banks, which prefer to lend to state-owned enterprises. In Zhejiang, and particularly in the manufacturing city of Wenzhou, near Ms. Wu’s hometown, underground lending markets catering to ambitious entrepreneurs have sprung up as a result.

Critics of the lower court’s decision also said that double standards had been applied in Ms. Wu’s case: well-connected defendants convicted of financial fraud appeared to get more lenient sentences, they said, than did Ms. Wu, a self-made tycoon who quit school as a teenager.

Opponents of the death penalty praised the supreme court’s decision and posted triumphant comments on microblogs, where discussion of Ms. Wu’s case had gained the most traction, especially among intellectuals.

“This is a victory for Internet public opinion in China,” wrote Hu Xijin, the editor of Global Times, a populist newspaper that often takes a nationalistic line. “I still say this: No murder, no death penalty. This applies to everyone.”

He Bing, the outspoken vice dean of the law school at the China University of Political Science and Law, wrote, “It should be recognized that the Internet provides a convenient venue for public supervision of justice.”

But in its ruling, the supreme court reaffirmed the guilty verdict in the case. That raises the prospect of Ms. Wu’s supporters continuing to lobby the courts to overturn the original verdict.

“Wu obtained an extremely large sum of money through fraudulent fund-raising, causing severe losses to the victims, undermining the national financial order and creating extremely harmful effects, and thus entails a penalty in line with the law,” the supreme court said in its ruling, according to Xinhua.

In an online interview with Internet users, Ms. Wu’s father, Wu Yongzheng, said he was “not satisfied” with the review by the supreme court and did not trust the court in Zhejiang to resentence his daughter.

Jerome A. Cohen, a scholar of Chinese law at New York University, said in an e-mail interview that the supreme court decided that the accused need not be sentenced to immediate execution, opening the way for a new sentence, including death with a two-year suspension. That usually means that the convicted person will never be executed; after two years of good behavior, he or she might get a life sentence.

“But, by sending the case back for resentencing, it leaves open the possibility that Wu may immediately get an even lighter sentence than a two-year suspended death penalty, such as 15 years,” Professor Cohen said. “This seems a typical Chinese judicial compromise between what those who call for the death penalty wanted and what Wu’s many supporters, both popular and professional, have called for.”

China executes more criminals than any other nation, but it is not unusual for a high court to reject a death sentence after a review. People following Ms. Wu’s case expected the supreme court to reject the original sentence after Prime Minister Wen Jiabao said at a news conference in March that the court should handle her case carefully.

Some people say the supreme court’s decision could also be related to a political scandal that has enveloped the highest ranks of the Communist Party.

Famously, there were no rejections by higher courts of any of the 13 recent death sentences that resulted from what was billed as an anticrime campaign in the western metropolis of Chongqing. That campaign, called “smash the black,” was started by Bo Xilai, the city’s party chief and ambitious member of the central Politburo.

But Mr. Bo was removed from his Chongqing post in March and is now under investigation for “serious disciplinary violations” while his wife, Gu Kailai, is being investigated in the murder of a British businessman, Neil Heywood. Many prominent lawyers say the smash the black campaign was an affront to the justice system, and some victims of it say it was an effort by Mr. Bo to destroy his or his allies’ personal enemies.

Li Bibo and Edy Yin contributed research.

Media Conference Call with Jerome Cohen: Tensions in the U.S.-China Relationship

BERNARD GWERTZMAN: Greetings. Welcome to our call-in show. And we have a lot of news to talk about today.

And we're lucky to have as the speaker Professor Jerome A. Cohen, who's probably the leading expert on Chinese law in this country. He's worked in China. He speaks fluent mandarin. And he's been writing his head off about the human rights problems in China for many years.

And I'm going to launch the first question, which is on the news, which just happened in the last several hours, this -- Jerry -- Chen Guangcheng, the blind Chinese dissident who had fled house arrest and somehow miraculously, with the help of his supporters, ended up in the American embassy in Beijing. And the coincidence in timing was fortuitous because Secretary of State Clinton and Mr. Geithner, the Treasury secretary, were on their way to China and they're there now for these annual security and economic talks.

And a deal apparently was struck with the Chinese government allowing him to leave the embassy, get medical help at the hospital and then to be transferred to another city in China where he'll be able to study and live with his family.

Can you fill in some details on this?

Read the rest of the conversation at:

Interview with Jerome Cohen on "Deciphering Beijing's Transition" with CFR

The Eighteenth Chinese Communist Party Congress opens on Thursday amid murky signals about the Chinese leadership transition, says CFR's Jerome A. Cohen. He says that of the top seven political leaders who make up the Standing Committee of the party, Xi Jinping, the designated next president, and Li Keqiang, the designated premier, are known, but "we don't really know what they stand for, what they're likely to do." Cohen says no matter who was elected U.S. president this week, it "isn't going to make much difference because every president, when the political rhetoric is over, has to come to grips with this rising, unknown difficult phenomenon" of China.

Two days after Americans voted to reelect Barack Obama as president, the Eighteenth Chinese Communist Party Congress will convene in Beijing, from which a new Chinese political leadership will emerge. What are your thoughts about this coincidence?

The processes by which the two governments select their leaders could not be more different. In Beijing, two days before the opening of the Congress that will select the seven top people, the Standing Committee of the Politburo of the Chinese Communist Party, very little is known. We know the identities of two of the seven: Xi Jinping, who next year is likely to be the next president of China, and Li Keqiang, who is slated to become premier. But we don't really know what they stand for, what they're likely to do, and we don't know how they've been selected.

What about the other five?

It's even murkier because it is not clear who they will be. There are still discussions going on, as far as we can tell. We don't know who the decision-makers are, who are the horse traders in deciding who's on and off the seven-person Standing Committee. Of course, all the contenders for the final five spots, even if they lose, will be on the broader twenty-five-member Politburo itself. But what do these people really stand for? Are they simply very intelligent, very cautious political bureaucrats who have risen through a variety of challenges, never really revealing what they think, always trying to pander to the policies of the higher-ups? And once they reach the inner circle, is there any way of knowing what they're going to do? Of course, in every government, it's hard to predict how a presidential candidate, for example, will behave as president.

Why don't you talk first a bit about the two who are definite, Xi Jinping and Li Keqiang?

Xi Jinping is a so-called "princeling." His father, former vice premier Xi Zhongxun, was a famous leader. Although he could be said to have grown up initially with the Communist equivalent of a silver spoon, he spent a long time out in the boondocks trying to carve out his own reputation for doing things without parental assistance. He's an intelligent, balanced person, well-educated, highly experienced, and virtually unknown – and perhaps unknowable. Predictions for him include, "Once he gets confident in office, he's likely to be an intelligent law reformer and political institution reformer." Another view, and more likely to happen, is he's likely to be a disappointing bureaucrat, some say in the model of former Soviet leader Leonid I. Brezhnev – someone who was not able to meet the challenges that a highly developing country is confronted by.

Li Keqiang is significant in one respect certainly. He is the first law graduate to assume a high office in the People's Republic. There's never been, as far as I know, any law school graduate in the Standing Committee in the Politburo. This man is highly intelligent. His classmates at Peking University Law School, where he graduated in 1982, give him high marks, although devoted to politics even at that time. Since then, he's shown little evidence of his legal training. He's shown no real proclivity for helping to reform a legal system that badly needs to be reformed. He has been highly political in some cases. People say he shows insensitivity to human rights. But again, all these people are enshrined in mystery and very, very cautious about saying anything publicly.

How much influence does President Hu Jintao maintain?

There is an ongoing negotiation among the leaders who have at least nominally retired, those who are about to retire, and those who are about to ascend to office. It's kind of a three-cornered struggle, or bargaining process, and it's all behind very, very closed doors where rumors emerge of a very uncertain nature. It's a preposterous way for the leaders of such an advanced and prominent country to be selected.

Even if one disregards the desirability of consulting the people of the country about who their governors are going to be, just from the point of view of an efficient way of arranging things, these people have not moved very far beyond the selection of the elite under the Manchu Dynasty. And when you get into murder plots involving one of the members of the Politburo, Bo Xilai, who was hoping to be among the seven members of the Standing Committee, and the poisoning of someone [Neil Heywood] said to be a foreign spy by Bo's wife, who feared exposure of their corruption, this is a little much.

Do we have any sense of how relations between the United States and China will be in the next several years?

The Chinese are confronted by a problem similar to ours. People worried, "What if Mitt Romney won? What will our China policy be, compared to if Obama won?" But experience over the last forty years suggests that it probably isn't going to make much difference because every president, when the political rhetoric is over, has to come to grips with this rising, unknown difficult phenomenon: China.

And the Chinese have a similar problem. They know they need the United States very, very much. They know they have interests that seem to clash rather sharply in some respects. And they know whoever takes over has to be cognizant of the complexity of the relationship and the desirability of not only sustaining it, but also improving it.

You have been very critical of China's human rights record. Can you speak to that?

The Chinese are faced with a broad range of challenges, not least of which is what to do about the rule of law. What is going to happen to a growing demand in the country for human rights, not just to close the gap, which is huge now, between rich and poor, but also to try to create institutions that will provide outlets for the very large number of grievances publicly expressed – often in violent forms – that seem to plague China? The leaders either have to continue to rely on repression, which seems to be their immediate weapon of choice, or they have to decide to give more vent to the increasing steam from below.

In the mid-1980s, in Taiwan, you had a Kuomintang Nationalist Party dictatorship that was confronted year after year by more and more demands for freedom, for democratic process, for liberal institutions. And they kept repressing them. Chiang Kai-shek's son, Chiang Ching-kuo, knowing he was quite ill and didn't have that much time to go, decided that they couldn't go on relying on repression. They had to start a process that would gradually open up the system and give greater participation to the rights-conscious people who were increasing every year in number. When I first went to Taiwan in 1961, he was in charge of the secret police. He was known to be a vicious repressor of all democratic instincts, especially those where people were trying to say they wanted to be independent of the Kuomintang mainland Chinese rule. And yet when he died in 1988, I found myself saying quite nice things about him, because in the years just before his death, he had initiated a process that has now – we can see a generation later – led to the first democratic rule of law society that the Chinese have ever really spawned. It is more democratic than Singapore and eons ahead of anything produced on the mainland.

Are any of the current leaders advocates of a more liberal policy?

You don't get to the top of this greasy pole by advocating liberal political reform, human rights, and rule of law. We never know until a person gets to the pinnacle how he's going to behave. Nobody knew in 1956 that Nikita S. Khrushchev was going to adopt a policy known as de-Stalinization. I had thought Khrushchev was another running dog of Stalin. Well he was, and he hated it. And when he got to power three years after Stalin's death, he initiated an opening process. It didn't go as far as many liberal reformers wanted, but it was a surprise to people, including the Chinese who were present at the Twentieth Party Congress of the Soviet Communist Party. Nobody knew that Mikhail Gorbachev, despite the fact that he was known to be a law school graduate, was going to engage in perestroika. He may not have known it himself.

The New York Times scrutinizes this fellow Wang Yang, the Communist Party secretary of Guangdong province, right next to Hong Kong. Wang Yang, from time to time, has sounded like he might be the next generation's liberal reformer among the party elite. Until about a year ago, he made considerable noises to support that idea and occasionally engaged in some enlightened policies. In the last year or so, though, he's been rather quiet, especially since the fall of Bo Xilai, who was often seen to be his opposite number and rival. He has been trying to behave himself so he would look just as staid and boring as the other candidates – innocuous, reliable, a team player, a consensus builder; not somebody who is colorfully going to stick his neck out and try to engage in democratic experimentation.

Professor Cohen cited in New York Times report on Ping An

This article was originally published in The New York Times on November 24, 2012 under the title, “Lobbying, a Windfall, and a Leader's Family."

SHENZHEN, China — The head of a financially troubled insurer was pushing Chinese officials to relax rules that required breaking up the company in the aftermath of the Asian financial crisis.

The survival of Ping An Insurance was at stake, officials were told in the fall of 1999. Direct appeals were made to the vice premier at the time, Wen Jiabao, as well as the then-head of China’s central bank — two powerful officials with oversight of the industry.

“I humbly request that the vice premier lead and coordinate the matter from a higher level,” Ma Mingzhe, chairman of Ping An, implored in a letter to Mr. Wen that was reviewed by The New York Times.

Ping An was not broken up.

The successful outcome of the lobbying effort would prove monumental.

Ping An went on to become one of China’s largest financial services companies, a $50 billion powerhouse now worth more than A.I.G., MetLife or Prudential. And behind the scenes, shares in Ping An that would be worth billions of dollars once the company rebounded were acquired by relatives of Mr. Wen.

The Times reported last month that the relatives of Mr. Wen, who became prime minister in 2003, had grown extraordinarily wealthy during his leadership, acquiring stakes in tourist resorts, banks, jewelers, telecommunications companies and other business ventures.

The greatest source of wealth, by far, The Times investigation has found, came from the shares in Ping An bought about eight months after the insurer was granted a waiver to the requirement that big financial companies be broken up.

Long before most investors could buy Ping An stock, Taihong, a company that would soon be controlled by Mr. Wen’s relatives, acquired a large stake in Ping An from state-owned entities that held shares in the insurer, regulatory and corporate records show. And by all appearances, Taihong got a sweet deal. The shares were bought in December 2002 for one-quarter of the price that another big investor — the British bank HSBC Holdings — paid for its shares just two months earlier, according to interviews and public filings.

By June 2004, the shares held by the Wen relatives had already quadrupled in value, even before the company was listed on the Hong Kong Stock Exchange. And by 2007, the initial $65 million investment made by Taihong would be worth $3.7 billion.

Corporate records show that the relatives’ stake of that investment most likely peaked at $2.2 billion in late 2007, the last year in which Taihong’s shareholder records were publicly available. Because the company is no longer listed in Ping An’s public filings, it is unclear if the relatives continue to hold shares.

It is also not known whether Mr. Wen or the central bank chief at the time, Dai Xianglong, personally intervened on behalf of Ping An’s request for a waiver, or if Mr. Wen was even aware of the stakes held by his relatives.

But internal Ping An documents, government filings and interviews with bankers and former senior executives at Ping An indicate that both the vice premier’s office and the central bank were among the regulators involved in the Ping An waiver meetings and who had the authority to sign off on the waiver.

Only two large state-run financial institutions were granted similar waivers, filings show, while three of China’s big state-run insurance companies were forced to break up. Many of the country’s big banks complied with the breakup requirement — enforced after the financial crisis because of concerns about the stability of the financial system — by selling their assets in other institutions.

Ping An issued a statement to The Times saying the company strictly complies with rules and regulations, but does not know the backgrounds of all entities behind shareholders. The company also said “it is the legitimate right of shareholders to buy and sell shares between themselves.”

In Beijing, China’s foreign ministry did not return calls seeking comment for this article. Earlier, a Foreign Ministry spokesman sharply criticized the investigation by The Times into the finances of Mr. Wen’s relatives, saying it “smears China and has ulterior motives.”

After The Times reported last month on the family’s wealth, lawyers representing the family said the article contained unspecified errors and that the family reserved the right to take legal action.

In addition, the Chinese government blocked access to the English-language and Chinese-language Web sites of The Times in China — and continues to do so — saying the action was “in accordance with laws and rules.”

Neither Mr. Wen, who is expected to retire in March, nor Mr. Dai, who is now the head of the National Social Security Fund, could be reached for comment.

Western and Chinese bankers and lawyers involved in Ping An’s 2004 Hong Kong stock listing and a subsequent 2007 listing in Shanghai said they did not know that relatives of Mr. Wen had acquired large stakes in the company.

Executives at Morgan Stanley and Goldman Sachs, which once held sizable stakes in Ping An and served as lead underwriters for the Hong Kong public offering, also said they were never told of the holdings. At Ping An’s urging, the two investment banks had also appealed in 2000 to Mr. Wen and other regulators for the waiver from the breakup rule. The private equity divisions of the two investment banks sold their combined stakes to HSBC in 2005 for about $1 billion — a 14-fold increase on their initial investment.

Thousands of pages of publicly available corporate documents reviewed by The Times suggest that the Ping An stakes held by the prime minister’s relatives were concealed behind layers of obscure partnerships rather than being held directly in their names.

In an interview last month, Duan Weihong, a wealthy Wen family friend, said that the shares in Ping An actually belonged to her and that it was an accident that Mr. Wen’s relatives appeared in shareholding records. The process involved borrowing their government identity cards and obtaining their signatures.

China and Hong Kong have detailed regulations on the disclosure of corporate information deemed material to a publicly listed company’s operation, like the identities of large shareholders and details about whether companies controlling large stakes are related parties. But legal experts say enforcement is often lax, particularly inside China. There is also, they say, a culture of nominee shareholders — when one person holds shares on behalf of someone else — that is difficult for even the most seasoned lawyers and accountants to penetrate.

The Times found no indication such regulations or any law was broken, nor any evidence that Mr. Wen held shares in Ping An under his own name.

After reviewing questions from The Times, the Securities and Futures Commission of Hong Kong and the Hong Kong Stock Exchange declined to comment. The China Securities Regulatory Commission in Beijing did not respond to inquiries.

HSBC, today Ping An’s largest shareholder with about 15.5 percent of its stock, declined to comment. The company announced last week that it is considering selling its stake in Ping An as part of a broad effort to raise capital.

Ping An today is a hugely successful conglomerate with revenue of $40 billion last year and about 500,000 insurance agents across China. It is China’s only fully integrated financial institution, with the second largest insurer, a trust company and brokerage house.

In late 2010, Ping An added more firepower, announcing a $4 billion deal that has since given it control of the Shenzhen Development Bank, one of China’s midsize commercial banks. Ping An is now building a new headquarters here in Shenzhen, a spectacular 115-story office tower that was designed by the New York architectural firm Kohn Pedersen Fox.

Ping An’s Close Call

Ma Mingzhe, the Ping An chairman and chief executive, was a high school graduate who got his start as an aide to Yuan Geng, a pioneering figure in some of China’s earliest economic reforms and an early leader of Ping An.

Impressed with Mr. Ma’s intellect, Mr. Yuan put him in charge of human resources at a state-managed industrial park, and eventually at a new insurance firm, Ping An, which took root in Shenzhen, a coastal boomtown.

Mr. Ma’s timing was opportune. China was just beginning to restructure its state-led economy. The government began dismantling the iron rice bowl system, which had guaranteed pensions, social insurance and living quarters to Communist Party cadres.

Although Ping An was founded as a state entity, it was one of the first Chinese insurance companies to experiment with Western management systems, including the use of actuaries and back-office operations, as well as foreign shareholders.

Mr. Ma helped manage the tiny company when it was founded in 1988. Several years later, he was looking for big-name shareholders from the United States.

In 1994, the private equity divisions of Morgan Stanley and Goldman Sachs each paid about $35 million to acquire 7.5 percent interests in Ping An. At the time, they were the largest foreign investments ever made in a Chinese financial institution.

Much of the company’s early success was attributed to Mr. Ma, a hard-charging executive who was admired for his management and political skills — and for taking risks.

“He had all the qualities of a great entrepreneur,” says Yan Feng, who helped run Ping An’s Shanghai office in the 1990s. “He was a quick learner, knew how to adapt to new situations and was really determined. He’d do whatever it takes to get what he wants.”

But the company’s growth drive ran into trouble in the late 1990s, when China’s economy weakened after the 1997 Asian financial crisis.

The bloated state sector began to collapse, and by 1998, some of the nation’s biggest banks were nearly insolvent.

Ping An’s hard-won fortunes were also evaporating. Like most big Chinese insurers, Ping An had won new clients with investment products that guaranteed big returns over long periods based on the high interest rates banks offered for deposits during a time of inflation. When interest rates plummeted in the mid-1990s, losses piled up.

In 1999, senior executives at Ping An began to acknowledge that the company could soon be insolvent. As a joint-stockholding company, Ping An had big institutional investors, mostly state companies. But many of them refused to come to the company’s aid by purchasing additional shares, which would have provided needed capital.

“They weren’t sure Ping An would survive,” said one former Ping An executive who spoke on the condition of anonymity.

There was also mounting pressure from the government. Worried about systemic risks to the financial system, regulators in Beijing stepped up their enforcement of laws that required financial institutions to limit the scope of their business activities.

Banks were told to sell their stakes in brokerage houses or trust companies; and insurance companies had to choose to operate in life or property insurance, but not both.

After China’s new insurance regulatory agency was established in 1998, it began pressing Ping An to shed its trust and securities business, and to split its life and property insurance divisions into separate companies.

At a news conference in November 1999, Ma Yongwei, then the chairman of the China Insurance Regulatory Commission, said the agency had already drawn up plans to split up Ping An and other insurers.

“The separation plans have been submitted to the State Council for approval,” Ma Yongwei told the media, adding that they would “deepen reform of the insurance system.”

Pushing Back the Regulators

With his company about to be broken up, Ma Mingzhe, also known as Peter Ma, fired off letters to leaders in Beijing, dictated memos reminding himself to “buy golf clubs” for high-ranking officials, and kept detailed charts outlining the lobbying responsibilities of each top executive at Ping An, according to a copy of those records verified by former Ping An executives.

Mr. Ma focused much of his personal energy on China’s highest government administrative body, the State Council, a 38-member group whose senior leaders were Prime Minister Zhu Rongji and Wen Jiabao, then vice premier. The company also sought the support of Dai Xianglong, the nation’s central bank chief, who also had oversight over the insurance industry.

Mr. Wen was in a unique position. He was head of China’s powerful Central Financial Work Commission, which had been established in 1998 to oversee the country’s banking, securities and insurance regulators, as well as China’s biggest financial institutions.

When Mr. Ma met regulators, he told them his company was facing insolvency and asked them to help shore up the company’s balance sheet by approving a Hong Kong stock offering, according to transcripts of Ping An meetings and interviews with participants.

“Now, Ping An’s life insurance is in a loss, and property insurance and the trust company have thin margins,” Mr. Ma wrote in the Sept. 29, 1999, letter to Mr. Wen. The contents were confirmed by two former top Ping An executives.

Rather than an out-and-out breakup, Mr. Ma offered a middle road. After seeking advice of other investors, Mr. Ma proposed the formation of a holding company that would effectively separate life insurance from property but keep them under one corporate umbrella, along with the securities and trust division.

The company, he said, would re-establish itself as the Ping An Group, according to Ping An documents reviewed by The Times. He then began looking for allies to promote his proposal.

In January 2000, with Mr. Ma’s backing, executives from Morgan Stanley and Goldman Sachs wrote a joint letter to Mr. Wen arguing that a breakup would “violate China’s policy to encourage and protect foreign investment,” according to a copy of the letter reviewed by The Times. The letter’s authenticity was verified by former executives at the two investment banks.

The American investment banks warned that “as a listed company in the U.S., we could be required to disclose our losses relating to the investment in Ping An, which would not be helpful for the image of China’s policy of reform and opening to the outside.”

The letter came after months of aggressive lobbying on the part of Ping An executives and the two American banks to persuade other high-ranking officials in Beijing, including the central bank and the insurance regulator, to hold Ping An together, according to corporate documents reviewed by The Times.

As early as 1999, executives at Ping An also began making contact with the relatives of Mr. Wen.

Hu Kun, a former Ping An employee who served as Mr. Ma’s staff assistant from 1997 to 2000, recalled a 1999 meeting between Mr. Ma and Zhang Beili, the wife of Mr. Wen.

Mr. Hu said he was not told what transpired at the meeting, but he recalled his boss’s reaction. “Because of that meeting, Chairman Ma got very excited,” said Mr. Hu, who is now living in the United States and who has quarreled with Ping An over 52,000 shares he claimed he was owed.

Corporate records reviewed by The Times indicate that Mr. Ma held an afternoon meeting and then dinner with the prime minister’s wife and Li Chunyan, who ran Ping An’s office in Beijing, on June 17, 1999.

It is not known what they discussed, but the relationship seemed to flourish. Around the same time, a diamond company partly controlled by the relatives of Ms. Zhang began occupying office space at the Ping An office tower in Beijing, according to records the diamond company filed with regulators. Later, a start-up co-founded by Wen Yunsong, the son of Ms. Zhang and the prime minister, won a lucrative technology contract from Ping An, according to interviews with former Ping An executives.

Mr. Ma, who is 56 and still runs Ping An, declined to comment for this article. Interviews with four senior executives who worked with Mr. Ma and Mr. Hu at the corporate headquarters in Shenzhen during the same period corroborate Mr. Hu’s recollections and the content of the documents reviewed by The Times concerning Ping An’s lobbying efforts and meetings with the relatives of Mr. Wen.

In addition, Li Chunyan, who ran the Beijing office, confirmed in a telephone interview that during that period he had brought Ms. Zhang to meet the Ping An chairman, Mr. Ma.

The documents and interviews shed no light on whether those meetings played a role in the decision by government regulators to abandon plans to split up Ping An. But in April 2002, the nation’s top regulators delivered their verdict. With approval of the State Council and insurance regulators, Ping An began the process of transforming itself into a financial conglomerate.

The company was not only allowed to retain property and life insurance licenses, but also licenses that permitted it to operate a brokerage and a trust company. It was also allowed to obtain a bank license.

Together, analysts say, the licenses were worth a fortune in China’s tightly regulated marketplace.

“They were one of the few who got to enjoy these gold-digging benefits,” said Bob Leung, a longtime insurance analyst at UBS in Hong Kong.

By late 2002, Ping An had not simply survived the downturn, its prospects had begun to look bright. The company’s restructuring bolstered revenue and profits. In October of that year, one of the world’s biggest banks, HSBC, agreed to pay $600 million to acquire a 10 percent stake in the company from Ping An. Just over a year later, regulators approved the company’s application to list and sell shares on the Hong Kong Stock Exchange.

While Ping An was preparing for its listing in Hong Kong, a group of investors with close ties to senior officials in Beijing, including Wen Jiabao, were quietly accumulating large blocks of Ping An stock.

Buying Into Ping An

On Dec. 26, 2002, Ping An filings show, a company run by Duan Weihong, a Wen family friend from the prime minister’s hometown, acquired Ping An stock through a company called Taihong. Soon after, the relatives of Mr. Wen and colleagues of his wife took control of that investment vehicle, the records show.

According to documents Ping An filed ahead of its Hong Kong listing, Taihong acquired 77.7 million shares of Ping An from the China Ocean Shipping Company, a global shipping giant known as Cosco, and 2.2 million more shares from Cosco’s Dalian subsidiary. A two-for-one stock split doubled the number of shares Taihong owned. So in June 2004, just before Ping An’s Hong Kong offering, Taihong held 159.8 million shares, or about 3.2 percent of Ping An’s stock, according to public filings.

In an interview, Ms. Duan said she had paid about 40 cents a share at current exchange rates, or a total of $65 million, to acquire the shares.

The price seems to have been a huge and unusual discount, analysts say, since HSBC had two months earlier acquired its 10 percent stake for about $1.60 a share, according to public filings.

Cosco did not return calls seeking comment.

For Taihong, it was a blockbuster purchase. By 2007, when the price of Ping An’s stock peaked, the 159 million shares were valued at $3.7 billion — though by 2007 Taihong had already significantly reduced its stake, according to public filings.

While Taihong was the shareholder of record, the beneficiaries of the Ping An deal were cloaked behind more than a dozen investment vehicles controlled by the relatives of Mr. Wen, including two brothers-in-law, a sister-in-law, as well as several longtime colleagues and business partners of his wife, Zhang Beili, according to corporate and regulatory documents. All of them were listed, along with Ms. Duan, as the owners of Taihong.

And by 2007, the prime minister’s mother, who is now 91, was listed on public documents as holding $120 million worth of Ping An stock through a pair of investment companies linked to Taihong.

Ms. Duan, who says she got to know the prime minister’s family in 2000, said that she bought the Ping An shares for her own personal account. The Wen relatives only appear in the Taihong shareholding records, she said, because her company borrowed the government-issued identity cards of other people — mistakenly, she said, from relatives of the prime minister — to help mask her own Ping An stake from the public.

“In the end,” Ms. Duan said, “I received 100 percent of the returns.”

The Fallout

In 2001, China issued new regulations that put restrictions on trading in listed shares by Communist Party members and their families.

For instance, the rules barred party officials in charge of a state-owned company from using their parents, children — or even their children’s spouse’s relatives — to trade stocks of a listed state-owned company.

The Times found no indication that Mr. Wen shared inside information with family members.

But there are many unanswered questions about the relatives’ holdings, analysts consulted by The Times said, like who might have known about the relatives’ purchases and whether anyone had a legal obligation to disclose that information.

Executives at Morgan Stanley and Goldman Sachs say they were unaware of the share purchases and were not involved in the transactions.

The companies also said that a typical I.P.O. process is unlikely to uncover the ultimate identity of shareholders who are hiding behind layers of investment vehicles using unrecognizable names.

According to regulations in Hong Kong and China, publicly listed companies and their professional partners who help sell shares to the public are legally obligated to disclose the identities of only those shareholders controlling a stake larger than 5 percent. The Times found that at its peak, Taihong, the investment vehicle tied to the Wen family, never held more than a 3.2 percent stake.

Another question that remains unanswered is how Taihong was able to buy shares of Ping An at a price that appears to have been highly discounted. By late 2002, Ping An had already become a hot I.P.O. prospect following a big investment by HSBC.

The answers to some of the questions, legal experts say, may turn on who was involved in brokering the deal that led to the relatives’ acquiring shares in Ping An in the period before the company’s public offering in 2004, and whether the deal-makers were seeking to gain favors from the regulators.

“The key questions are: why were these people chosen, and on what terms did they get the shares?” said Jerome A. Cohen, a professor at New York University Law School and an expert on China’s legal system. “Obviously, everyone would like to get in before a hot I.P.O.”