How a Party Leader Fell Off a Urumqi Mountain; Yang Gang lost his clout when investigators started looking at a project that extended from Xinjiang’s capital city into nearby mountains

03.17.2014 13:15
How a Party Leader Fell Off a Urumqi Mountain
Yang Gang lost his clout when investigators started looking at a project that extended from Xinjiang’s capital city into nearby mountains
By staff reporter Li Yan

(Beijing) – Police nabbed property developer Zhao Xingru and detained her for more than 30 days in late 2012 and early 2013 based on fraud allegations filed by executives at one of the country’s largest developers, Hangzhou-based Greentown China Group.
But the detention ended abruptly and in the end Zhao was cleared of several serious charges leveled by Greentown, including contract forgery and faking transaction documents.

How did Zhao dodge the bullet? Sources told Caixin all credit goes to Yang Gang, a high-ranking Communist Party and central government official with deep ties to the real estate business in Urumqi, thousands of kilometers west of Hangzhou.
“Yang used his connections to spring Zhao” and apparently trump angry Greentown executives, said the source, who is close to the Urumqi real estate sector.
Apparently it wasn’t the first time that Yang had used his power to snub the law and get what he wanted. And that’s why, less than a year after Zhao was released, that the ax fell on Yang.
The party’s Central Discipline Inspection Commission announced in December that Yang, who had been serving in Beijing as deputy director of the Economic Committee of Chinese People’s Political Consultative Conference (CPPCC), the country’s top political advisory body, was being investigated for illegally using his position to profit from a Urumqi real estate project spurred by the local government in violation of central government rules.
Deep Connections
Yang, 60, was elevated to his most recent central government post in 2013 after serving three years as deputy director and deputy party secretary for the central government’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).
Before arriving in Beijing in 2009, Yang held government and party positions for the governments of the Xinjiang Uyghur Autonomous Region and its capital city, Urumqi, for more than 40 years. He worked as party secretary for the Urumqi municipal committee, for example and as Xinjiang’s deputy party secretary.
Caixin has learned that Yang is being probed in connection with alleged wrongdoing in Xinjiang and the Urumqi real estate industry.
Claims that Yang and his relatives pocketed illicit profits apparently stem from the testimony received when police questioned several Urumqi real estate developers. About 10 developers were questioned at various times in 2013 as part of a probe into deals involving the city’s projects of developing the desolate mountains.
Sources said that Yang had gotten involved in the program in 2002. Allegedly, that’s when he started accepting bribes from developers looking for the government’s help.
Free Land Transfers
Bribery may have been the most expedient means of obtaining land for commercial and residential building projects in Urumqi, a city with a chronic shortage of tracts suitable for new development.
Yang’s response to developer demand for land prompted his decision in 2002 – shortly after he was appointed Urumqi party secretary – to expand the city’s development north, east and west. The campaign included plans to erect buildings in the mountains near the city and reclaim a shuttered coal mine called Liaodaowan.
Before the campaign, the Urumqi Forestry Bureau said, the city’s urban zone was surrounded by about 28,350 hectares of undeveloped mountainous land.
In March 2002, the Urumqi party committee and municipal government encouraged local enterprises and individuals to join the program. New policies were enacted that allowed essentially free land transfers from the government to builders, even though rules issued by the State Council, China’s cabinet, bar free land transfers for any reason.
Developers and other builders who participated in Urumqi’s expansion project could obtain 50-year land rights, including rights to forests.
To ensure a pleasant environment, building contractors were required to develop no more than 30 percent of the land. The bulk of the project area was to be green.
But local officials knew that the program flew in the face of central government regulations, a Urumqi land bureau official said. The campaign was locally justified, however, as part of a broader effort to boost development in Xinjiang and other western regions.
On paper, the program’s contracts between developers and the Urumqi government specified a transfer price of 5 yuan per square meter. But in fact the fee was waived “which one could discern by looking at a contract’s total funding outlay,” said a Urumqi land bureau source.
The program caught the attention of Beijing authorities in 2008, when officials from the National Audit Office investigated Urumqi’s land transfer finances. They noticed that land transfer fees had been waived. Local officials tried to defend the practice.
“We pointed to the (national) policy for developing western China, but they didn’t buy it,” said a Urumqi land bureau official. “So we had no choice but to admit fault.”