The Lenovo Juggernaut Rolls on Unabated

June 10, 2014

Dr Pikay Richardson

Chinese personal-computer maker Lenovo Group is looking to acquisition to fuel further growth. The company has great ambitions, and cash to fund its plans. Will it be able to balance innovation and efficiency?

Lenovo recently concluded two deals worth collectively about $5bn. The company has acquired IBM’s low-end server business for $2.3bn and from Google, Motorola Mobility handset operations for $2.9bn. Both were seen as Lenovo’s efforts to diversify beyond PCs into other faster growing areas of the computer industry.

Growing through acquisitions

Lenovo’s foray into other business segments was not entirely surprising. Having beaten HP to become the world’s largest PC maker by shipments, it has been looking for new sources of growth, mainly in smart phones and servers and storage systems. “We will continue to use acquisitions as a means to grow”, Lenovo Chief Executive Yang Yuanqing said after a shareholders meeting in Hong Kong. “Wherever there is a good opportunity, we will grasp it”.

The company has great ambitions, and an extra cash store to match. After paying $4.7bn, it still has $2bn on hand, according to Wang Wai Ming, Lenovo’s chief financial officer. What is more, the current low-interest environment provides opportunity to raise further funds, which Lenovo is considering, according to Mr Wang.

Lenovo’s strong corporate governance regime

Investor confidence is high. On 21st May, Lenovo announced its full-year results in Hong Kong where it has been listed since 1994. Its revenues were 14% higher than the year before, at $38.7bn, while pre-tax profits topped over $1bn for the first time in its history, up 27% on the year before. But this is only part of what is causing the investor euphoria. The other is that, Lenovo unusually for a Chinese Company, claims a strong corporate governance regime, as well as consistently delivering predictable returns.

Lenovo’s ability to turn around the controversial $2.9bn purchase of Motorola Mobility has been questioned. The pioneer mobile phone has fallen on hard times, but Mr Yang has responded to skepticism by saying that he was confident his company will be able to turn around the unprofitable business in four to six quarters, based on a strategy of increasing economies of scale rather than trimming staff.

From losers to treasures

“We have a good track record of turning around money-losing businesses into treasure”, he said, pointing to Lenovo’s first foray into foreign markets when it bought IBM’s loss-making PC business in 2005. Few believed then that an obscure Chinese company could save a Western premium brand, but this is precisely what Lenovo has done. Yang went on “Lenovo is the best company in the world when it comes to balancing innovation and efficiency.”

Whether or not this claim is sustainable is more a matter of “wait and see”.


Alibaba’s Jack Ma goes down the Bill Gates charitable route

May 5, 2014

Alibaba’s Jack Ma and the company’s co-founder Joseph Tsai are following the path taken by Bill Gates and Warren Buffett in creating a philanthropic trust.

An article entitled China’s Carnegie in The Economist, [May 3rd, 2014. P12] outlined this further example of creative capitalism.

The article traces the philanthropic ‘conversion’ of business pioneers and wealth generators from the days of Andrew Carnegie to today’s Jack Ma who has recently [April 2014] announced the formation of a $3 billion trust.

A cynical view of giving

The Economist is suspicious of altruism if a self-interested explanation comes to hand. It tests the ethical orientation of Ma’s actions and implicitly those of Bill Gates by suggesting that a cynical view that might be ‘straight out of a Silicon Valley public relations play-book ahead of Alibaba’s expected public offering this year which could value the company at $150 billion.’ Regardless of such imputed motivation, the initiative could add impetus to China’s efforts at environmental sustainability.

The Gates Foundation

Bill Gates and Warren Buffet have been leaders in a movement for the wealthiest capitalists to pledge sizable proportions of their assets for charitable purposes. The Gates foundation is admirably led by Biil and Melinda Gates.

From Silicon Valley to Shanghai

The movement has spread into other parts of the world including India. Jack Ma is overcoming reluctance of the wealthiest Chinese entrepreneurs to reveal their wealth as the country develops its new mixed socialist/capitalist political economy.


African Entrepreneurs suffer from venture capital shortage

February 14, 2014

African EntrepreneursLocal Entrepreneurs in Africa are disadvantaged by a lack of venture capital

In an article for Computer World, [November 2013] journalist Rebecca Wanjiku suggests several factors that may be contributing to a shortage of funds for new technology start-ups. There is no parallel with the vibrant venture capital hubs such as Silicon Valley in America or the University spin-off science pars flourishing in Cambridge [American or English versions].

The perceived challenges of businesses operating in Africa as well as the higher costs of due diligence and inexperience of the investors and entrepreneurs in the region have all worked to dampen the growth of venture capital funding for tech start-ups and mid-level businesses on the continent, according to industry insiders.
Local start-ups have held discussions and wondered whether their lack of success in raising big money had racial overtones. Companies run by whites seem to be luckier in securing funds. The problem, however, seems to be more about the perception of inexperience and a lack of contacts than race.
“I don’t think it’s about being white or black, it’s about your network; highly networked Kenyans have an easier time too,” added Erik Hersman, founder of the iHub Nairobi, a co-working space for techies.
“Innovative early stage ventures with the potential to yield high social and environmental impact and requiring less than $500,000 in financing remain the most difficult segment of the SME pipeline to reach,” said Ben White, founder of VC4Africa. VC4Africa is an online portal that brings together 13,000 entrepreneurs, VCs and angel investors interested in Africa. It was kicked off at the annual congress of the African Venture Capital Association in Dakar, Senegal, in 2007. Last year, VC4Africa start-ups secured $80,000 in funding while companies seeking expansion secured an average of $237,000 in funding.
VC4Africa works with entrepreneurs in 40 African countries but the number of start-ups and growing companies seeking funding outstrips the available capital. The lack of in-country funding mechanisms and lack of tech-specific financial facilities from the public sector most likely means that the problems will persist.

Leadership challenges

Leadership challenges abound. The contrast with the developments emerging in China, is stark. A similar sense of the availability of entrepreneurial venture backing is reported in India.


The execution of Jang Song-thaek, and the limits of The Great Man theory of leadership

December 14, 2013


The Great man theory of leadership has been gradually eroded by recognition of the ultimate dilemmas of absolute power

The execution of Jang Song-thaek in North Korea this week [December 2013] has been presented outside the state as evidence of the ultimate power vested in its absolute ruler, Kim Jong Un. This assumes that the newly appointed ‘great leader’ acted without being influenced by anyone else. This is generally assumed as the action of someone with absolute power

As The Telegraph put it

In making this very public display of ruthlessness Kim Jong-un probably had three objectives. Firstly, [sic] nobody in North Korea can doubt now that he, and he alone, is in charge. Nor can anybody doubt that he is utterly ruthless in removing absolutely anybody who might, in the colourful language of the indictment, “dream different dreams”.
Secondly, Kim Jong-un has told his country – and the world – that not only Jang the man, but also the vision that he stood for, has been purged. Jang Song-thaek seems to have argued for a less closed North Korea, one that embraced trade and encouraged inward investment.
Thirdly, this is a slap in the face for China. China is often described as North Korea’s only ally but with every nuclear test and every provocative missile launch the relationship has become more strained. After North Korea’s third nuclear test in February China recalibrated its policy to North Korea.

The contradiction

Kim has acted decisively to ‘crush’ his enemy, as recommended by Machiavelli. I always felt this advice requires careful positioning in its historical context. Anyway, the leader who has to crush his enemy can hardly be the great all-powerful leader who is feared but not hated. It seems more like the leader beleaguered by forces internal and external to his regime.

Little wonder that ‘Great man’ theories of leadership are gradually drifting out of fashion.


Glaxo takes hit in China, but these are global dilemmas for Big Pharma

August 6, 2013

Glaxo Smith Kline faces a serious scandal for its business practices in China. There are serious implications for the entire global pharmaceutical industry

Some years ago, I wrote of the dilemmas facing Glaxo as its then chief sought to address criticisms of the gap between corporate actions and its rhetoric of corporate social responsibility. The entire pharmaceutical industry has been a favourite target on the internet under the cover-all term Big Pharma, as long-term profits were threatened, and speed-to-market pressures increased. Various unpleasant and often illegal practices were revealed.

The $400 million scam

Glaxo Smith Kline [GSK] is currently [July 2013] the centre of another scandal through its operations in China. The company is accused of a $400 million scam involving bribing doctors. Eighteen Glaxo employees have been arrested in China. The Chinese authorities claim a network of 700 people has been involved.

The issues are those facing the global giants known collectively as Big Pharma. The current story has a depressingly familiar tone. Last year [2012] Glaxo Smith Kline was hit with a $3bn fine for mis-selling drugs in the US. To date, the city has taken a relaxed view on the affair. Analyst Nils Pratley disagrees, offering three reasons:

First, reputation matters to drug companies and to Glaxo chief Andrew Witty who has been on a clean-up campaign during his five years in charge. After [last year’s fine] Witty said he was dealing with “echoes of the past” and announced his determination that such events would never happen again.

Nobody should doubt his sincerity but the Chinese allegations, if they are proved, would represent a serious failure of management. As far one can tell, GSK put in audit controls that it thought were sufficient for China; it may have been bamboozled by a sophisticated internal scam that was hard to spot without access to private bank accounts and emails. But that would be an explanation of failure, and won’t help GSK on the image front. Witty the unwitting is poor branding when you are dealing with governments around the world.

Second, GSK will probably have to rethink its entire model of doing business in China and other “high risk” countries. That signals disruption ahead as internal compliance controls are overhauled yet again.

[Eventually] in China, GSK will have to arrive at a working arrangement with a central government that appears to have a twofold agenda of running an anti-corruption drive and getting more funding into its dysfunctional healthcare system. Greater opportunity for GSK could emerge from the mess [through lower costs but greater volumes of sale and a better-regulated market.} But, to judge by the current aggressive rhetoric in China, the road to that position could be very long indeed. The story is still developing, but the City looks to be underplaying it.

I have long argued that the ‘pipeline’ model of innovation long-accepted by Big Pharma is in need of rethinking. It is based on a belief that success requires a pipeline of massive proportions through which vast numbers of candidates proceed in a Darwinian series of tests. Commercial pressures have ramped up the size and speed of operations. The temptation to ignore corporate social responsibilities is strong, regardless of the rhetoric and the establishment of CSR departments. Sir Andrew faces a host of leadership dilemmas.

July 2014

China continues legal proceedings

See Feldman, S. (2013) Trouble in the middle, oxford: Routledge for a broader analysis. http://blogs.wsj.com/chinarealtime/2013/08/01/eight-questions-steven-feldman-trouble-in-the-middle/

Accessed, July 12th 2014


Why business students like the Alibaba case and Jack Ma

March 23, 2013

Jack Ma wikipediaWhen Asian business students are asked to write about leadership, one of their favourite topics is the Chinese telecommunications giant Alibaba, and its dynamic leader Jack Ma

This is hardly surprising. The company has grown through the vision and enterprise of its founder. Already a host of corporate stories are developing around him and his giant baby, recently valued at 35 billion dollars.

The Jack Ma story

Jack Ma fits the profile of the creative entrepreneur. His decisions are imaginative. He describes his leadership journey in vivid anecdotes which suggests that he has a well-developed transformational style. An English teacher and graduate of Hangzhou, Mr Ma became a skilled web site builder, one of the first in China.

When he was thinking about going international he looked for a corporate name that worked in Chinese but which also had global connotations. Once when in America, someone mentioned the story of Ali-Baba to him, and he thought he had found what he was looking for. He tested his idea quickly and locally, as found there was surprising recognition of the story from the Arabian Knights, and the magic password Open Sesame which opened up a cave full of treasures.. Yes, my company could be remembered for opening up a place full of treasures, he thought. Ali-Baba had brought prosperity to his village.

He listed the new name slightly differently, noticing that it was also effective when written in Chinese characters.

A sprawling conglomerate

Alibaba, founded in 1999, was to grow into the largest private corporation in China. It was described by Bloomberg Business Week as a sprawling conglomerate of web-based companies. The largest elements are Taobao and the Alibaba group. The former is a Chinese version of E-Bay and was to become market leader in e-commerce in China

Its Business relationship with Yahoo has been controversial. Alibaba grew and prospered under its founder-leader, Yahoo struggled to compete in its more global business.

Time to quit says Jack Ma

Recently, the founder has decided to hand over the leadership to a senior executive Jonathan Lu in advance of an anticipated initial public share offering which is being predicted to match that of Facebook [or more, as Facebook's shares have dipped this year]. The South China Post stated:

The announcement came a few days after Alibaba, which Ma founded in 1999, announced a sweeping restructuring that will divide the group into 25 business units under the direction of two committees, one for strategy and the other for operations. In an e-mail sent to Alibaba’s more than 24,000 employees worldwide on January 15, Ma said he decided to relinquish his position as chief executive because the company had people who “are better equipped to manage and lead an internet ecosystem like ours”.

Ma described how he realised years ago that he was not suited to be a traditional chief executive of a big firm. He said that “at 48 I am no longer ‘young’ for the internet business”. What he aims to be is “a good partner to more capable colleagues”, which he intends to accomplish by continuing his role as executive chairman.

Ma described the restructuring as “the most difficult reorganisation” in Alibaba’s history. But it is a bet to stay competitive in the mainland’s fast-growing e-commerce market. JP Morgan has estimated this market to be worth US$436 billion in 2015. The move fuelled speculation that Ma was laying the groundwork for Alibaba’s initial public offering, which the company has denied.

What happens next?

Predictions are generally favourable. I agree with The Economist [March 23rd 2013] which noted that while the future is promising “…there is nothing inevitable about Alibaba’s future fortunes”. I urge students of leadership to do a little ‘map testing’ before accepting that newspaper’s casual SWOT analysis: [1] that Alibaba could overreach itself; that [2] it would face the risk that ‘foreign governments will clamp down’ and [3] face an internal threat because ” The Communist Party is bound to be jealous of an outfit that has so much data on Chinese citizens.”

I’m afraid that piece of analysis would have not obtained a particular high grade, if it had been supplied in a student assignment on Alibaba’s prospects.


Holy Smoke: The symbolic nature of voting processes

March 17, 2013

Pope FrancisThe election of Pope Francis illustrates the symbolic nature of the voting process deployed by the Catholic Church in the selection and election of its spiritual leader. But how different is it to the practices of decision making found in many other Organizations?

In a papal election the symbolism is evident. The conclave of Cardinals assembles in Rome from around the world and its members are prepared for their elective duties. Through dress, location and traditional rituals they are reminded of their sacred duties. The process combines periods of prayer, periods of intense discussion cut off from the ears and eyes of the world. The votes are recorded anonymously, each Cardinal adding a single name to a simple voting slip. these are scrutinized to assess if the required majority has been reached. In either case the slips are ritually burned to provide one of the most famous of signs, the smoke emerging over the Sistine chapel, black for an inconclusive result, white for the awaited news that a new Pope has been elected. [Incidentally, the chemicals now used to achieve the dark and white plumes are pretty noxious...]

Unique and Universal

The ceremony is unique. Yet I suggest it has near-universal aspects which can be noticed in leaders appointments elsewhere. This week, for example, election results were announced in The Falkland Islands and in China.

More symbolism in voting

In each case there was a heavily symbolic component. The Falklands have remained disputed territory between Britain and Argentina which the ‘Thatcher war’ did little to resolve. In the Falklands referendum-type vote, , 98.8% voted to remain British. Three votes were cast against. In China, the electorate voting for President Xi returned an almost identical 98.86%. I will spare you lengthy political analysis. There was one point I found interesting made my commentators in each. On the Falklands, a spokesperson said the result was good because a 100% vote might have seemed suspicious. A Chinese blogger said it was Xi himself for reasons of modesty returned the one vote against, not wanting it be seen as voting for himself.

My unreasonable view of voting

Like many citizens around the world, I value the symbolism of participating in voting. But part of me carries a suspicion that many ballots are more about symbolic process through which a contested election appears to be ‘the will of the people’. Too often, the voting conceals the power behind the ballot box, for example in the choice of candidates or voting procedures. This applies to decisions of corporate boards as much as to those made in the election of a parliamentary representative or a President.


News International Update

April 25, 2012

The fate of Rupert Murdoch’s business empire continues to attract attention globally. Leaders we deserve is providing regular updates, as the Leveson Enquiry in the UK into Government and news media relations continues

Updates

This post will be updated regularly. Earlier LWD posts include:

The Murdoch meltdown
The closure of The News of the World
The business model of Rupert Murdoch

May 12th

Leveson enquiry continues to attract media attention with Rebekah Brooks, the former Sun editor, taking the stand at the Leveson enquiry. The BBC asks whether she have been treated differently if she had she been a “grumpy old man of Fleet Street”

Her testimony suggests that the Government will face more political problems from the stories produced through the enquiry which was set up by Prime Minister David Cameron. These appear to leave the spotlight on culture secretary Jeremy Hunt, as well as Mr Cameron’s own relationship with the former Sun editor.

May 10th

Selective amnesia and his status as someone on bail in connection with phone hacking hinder evidence to Leveson from Andy Coulson

Independent newspaper suggests Coulson’s evidence ‘leaves toughest questions at Prime Minister’s door’.

Personal view [TR notes for LWD]:

Coulson at times showed a grasp of the unspoken implications of questioning as well as more generally as someone thoroughly cautious and well-prepared with a few key points to make (no conspiracy; was not hired to influence Robert Murdoch’s political decisions.

May 9th

Story picks up as Leveson enquiry resumes. David Cameron’s closeness to Rebekah Brooks is not particularly new.

May 3rd 2012

BskyB distances itself from its major shareholder News Corporation in a statement from its chief executive Jeremy Darroch.

May 2nd 2012

Select committee finds Rupert Murdoch unfit to run News International. James Murdoch is also severely criticised.

Committee appears to have exceeded its brief, particularly with the most damning criticism, where voting occurred along partisan lines.

The Washington Post notes:

The parliamentary report issued Tuesday [Ist May 2012] was far harsher than most British observers had expected. It was approved by a 6 to 4 vote, with the four members from Prime Minister David Cameron’s Conservative Party staunchly objecting to the description of Murdoch as an unfit proprietor.

April 30th

The former First Minister of Scotland Jack McConnell reported as political target of phone hacking by Rupert Murdoch’s News International.

Jeremy Hunt ‘On probation’ by Prime Minister’s statement.

April 29th

Telegraph reports Cameron could fire Hunt if new evidence emerges.

April 28th

Leveson rejects Government plans to review Jeremy Hunt’s conduct over BSkyB bid saying “It’s not my problem”

April 27th

The Guardian: Rupert Murdoch’s evidence to the Leveson inquiry was like one of his tabloids: a lively mixture of accurate and inaccurate reporting, one-eyed comment and total fantasy.

Sky News, itself part of the story reports on Simon Hughes’ call for an investigation into Jeremy Hunt’s conduct during BskyB takeover bid.

The Belfast Telegraph reports that George Osborne is facing questions over whether he was lobbied by Rupert Murdoch and played a role in supporting News Corp’s attempted £8bn takeover of BSkyB.

April 26th Murdoch

Two inter-related stories today. In Parliament, Jeremy Hunt defended his ‘quasi-judicial’ role in the BskyB bid by Rupert Murdoch’s News Corporation. Mr Murdoch appears before the Leveson enquiry into Media ethics.

The BBC reports Rupert Murdoch’s witness statement

The Independent sees the Jeremy Hunt story as “a toxic trail” leading from Jeremy Hunt to the Prime Minister’s involvement in the Murdoch bid for B Sky B.

The Scotsman: Cameron admits “we all did too much cosying up” to The Murdochs.

April 25th 2012

The BBC continues its reporting of the Leveson enquiry with a ‘What the papers say’ review.

The Daily Telegraph examines the testimony of James Murdoch [24th April 2012] to the enquiry concluding that the Government’s relations with the Murdochs are coming under close scrutiny and ‘revealing a lack of candour’

The Guardian focuses on another close political relationship: between Rupert Murdoch and Alex Salmond

April 23rd 2012

Lord Patten tells Leveson enquiry:

Plainly, Mr Murdoch took the view that publishing a book which was critical of the Chinese leadership would not improve his chances [of expanding his business interests in China] , so he instructed HarperCollins to drop the book on the grounds that [the book] was no good”.

Image

Image of Rupert Murdoch is from livetradingnews.com


The rise and fall of Bo Jilai and Gu Kailai [Updated]

April 15, 2012


The fast-changing story is being updated here. An earlier post reviewed the accounts of the political demise of charismatic leader Bo Jilai and the prosecution of his wife and one-time celebrity lawyer Gu Kailai, for the alleged murder of British businessman Neil Heyward, a friend of Bo.

The updated post draws on a wider set of information sources, including links with Chinese language sites where English language translations are available.

November 8th 2012

WEstern news reports indicate link between murdered businessman Neil Hayward and British security forces

October 26th 2012

Bo expelled from Parliament but unlikely to stand trial before upcoming elections

October 22nd 2012

Interesting debate on a wide range of issues , including the Bo Jilai affair

September 28th 2012

Bo Jilai expelled from the Chinese Communist party . Western reports drawing on sources within China suggest that dealing with Bo Jilai has become a major consideration within efforts to arrange a smooth transition to new leadership.

September 24th

The story continues with the trial and conviction of Chongqing police chief Wang Lijun for 15 years in prison finding him guilty of “bending the law for selfish ends, defection, abuse of power and bribe-taking.”

August 2012

The post has been updated to report the series of events leading to Gu’s arrest for murder, and her being given a suspended death penalty. There is little news of Bo Jilai. Commentators inside China suggest there is little public coverage, and little sympathy for the victim who is portayed as involved in a financial scam or blackmail extorting money from Gu Kailai.

May 10th

Francis Fukuyama speculates that Bo was ousted on fears he might become ‘the next Mao’

The Indian Express challenges theory of Chinese resilient autocracy. (effective succession planning)

May 9th

Korea Times argues that the tensions in China including the Bo Xilai case may lead to ‘recalibrating’ of foreign policy towards North Korea

May 7th

New York Times evaluates Bo Xilai as brilliant…ruthless…[with a ] penchant for power and glory [which] earned him powerful enemies.

May 6th

More rumours of the defection of Police chief Wang which triggered the Bo Xilai political downfall.

[Posted in advance of cover date, May 14th by Time Magazine]. An in depth analysis argues that China’s move to technocratic leadership is becoming re-politicised

May 4th

Bo Xilai and Chen Guangchen stories examined by Voice of Russia for Eurasiaview

May 3rd

Thoughtful analysis of ‘The Bo Xilai crisis’ by The Toronto Star

May 1st

Western sources appear to contradict the story of Bo Guagua and the red Ferrari .

April 30th

Gu Kailai asked a British firm to accept a secret £150,000 over-payment and to use the money to pay her son’s school fees at Harrow, a former company director alleges

April 28th The Western media have shown diminished coverage of the Bo Xilai story. Attention has switched to his wayward son Bo Guagua. There is also some mention of Guagua’s half brother Li Wangzhi.

April 27th

Bo Guagua: Not a Ferrari but a Porsche says Wall Street journal

Details of the driving offences from the English version of Elenco Notizie, Italy.

April 26th

Western news reports claim Bo was involved in phone monitoring of China’s top politicians including President Hu Jintao

April 25th

Police chief Wang Lijun had told US officials that Mrs Gu was directly involved in Heyward’s murder by cyanide

Bo Guagua defends his life style in Harvard newsletter but avoids reference to the broader Bo Xilai story

April 24th

Other stories seem to be supplanting this one for global interest. The BBC China Round Up gives a dozen other URLs but no mention of the Bo Xilai one.

April 22nd

Reuters report [April 17th, 2012] China’s Bo backed, then blocked murder probe against his wife

April 21st

A US-based Chinese-language website that has reported extensively on the Bo Xilai scandal in China says it was crippled for several hours by a concerted hacking attack.

April 20th

A BBC TV report widens accusations against Bo Xilai.

April 19th

Business Week claims Bo Xilai Son Not in Custody, Remains at Harvard

NTV report based on Chinese websites examines mutual accusations between Bo Xilai and Chinese security chief Zhou Yongkang. Photo of Zhou from Xinhua via Want China Times, Taiwan

As state officials attempt to control the story, the Chinese blogosphere has devised its own coded language to circumvent censorship.

April 18th
Prime Minister David Cameron and politburo member Li Changchun hold constructive talks in London.

Foreign Minister issues written statement about the Heyward case and is quizzed in Parliament.

BBC updates its reporting

April 17th

Western reports turn attention to lavish lifestyle of Go and Gu’s son, Bo Guagua. Image is of a Ferrari which crashed in Beijing and was allegedly that of Bo Guagua.

The Shanghaist considers the (British) Daily Telegraph a good source of information on the developing story of “our favourite playboy”, and reports his possible asylum bid being helicoptered from Harvard.

The BBC reports that Prime Minister David Cameron will raise the issue of Mr Heywood’s death today at a meeting in Downing Street to discuss trade, cultural and education links with politburo member Li Changchun.

New York Times also reports on story

April 16th

English East Day outlines official Chinese statement on the way the investigation into Bo Xilai and the arrest of his wife Bogu Kailai has been conducted through the rule of law in China.

‘Unconfirmed’ reports in British tabloids such as the Daily Mail suggest Heyward had an affair with Gu Kailai

The Australian claims Heyward will be named a spy for MI6 based in contacts with intelligence gathering agency founded by former MI6 employee.

April 15th

Heyward’s death linked to murder by suicide

April 14th

More about the life style of Bo Guangua

April 13th

Freedomnewsgroup provides English language links of the developing story.

Daily Times of Pakistan reports that China has deleted thousands of online posts over ‘rumours’ and temporarily closed others for ‘rectification’.

A post from the Economist gives more background to the story

New York Times adds a few more details to earlier accounts

August 22nd

Bo Xilai goes on trial. A long-running drama reaches a critical stage.

Sept 22nd 2013

Bo Xi Lai trial trial ends with life sentence. Wall Street Journal assesses political implications


The rise and fall of Bo Jilai and Gu Kailai

April 12, 2012

The rise and fall of the charismatic political leader Bo Jilai provides an insight into political leadership processes in contemporary China. The story took on an additional twist with the prosecution of his wife and one-time celebrity lawyer Gu Kailai, for the alleged murder of British businessman Neil Heyward, a friend of Bo.

Jonathan Fenby of the Guardian provides background to the story. [April 10th 2012]

Though he had cut a swath for the past five years with his promotion of his mega-city of Chongqing, complete with the singing of old patriotic songs, Bo was (a) too flamboyant and uncontrolled a figure to be tolerated by the consensus board that runs China, and (b) lacked solid factional support. He was too much of an individualist in a system that works by committee. Whatever fame it brought him, his ambition made him vulnerable in the end. [But] Bo fell because he was too much of a tall poppy and lacked allies – his handling of the fall-out from Heywood’s death in a Chongqing hotel room was also exceedingly clumsy.

Gu Kailai and the Neil Heywood murder case

The downfall of Bo was spectacular enough, but then the story took on a more sinister tone with the arrest of his wife Gu Kailai for the death of Neil Hayward

Gu, Bo’s second wife, seems to have much in common with her husband. Like him she is known as charismatic, eloquent and bold. She forged a high-profile career as a lawyer, which she bolstered with two books on her successes representing a well-known sports coach and Chinese firms challenging a US court judgment.
Like [her husband] she comes from party aristocracy: although her mother was descended from a famous Song dynasty minister, her father, Gu Jingsheng, was a renowned Communist general. But as her husband climbed the political ladder, Gu’s public profile declined dramatically. Bo told reporters last month [March 2012] that she gave up her career two decades ago so she could not be accused of benefiting from his position.

She is thought to have spent much of her time in the UK, where their son studied at Papplewick, a prep school in Ascot; Harrow and then Oxford University from 2000. It is understood Gu had suffered from depression in recent years, and it is thought she may also have sought treatment in Britain.

Heywood, who told friends he got to know the family after writing to several leaders in Dalian to introduce himself, said he had helped arrange [their son] Bo Guagua’s education. According to the Wall Street Journal, he was among a small group of friends and advisers on whom Gu relied in recent years.

The Guardian editorial

In a subsequent editorial, The Guardian described the developing story as evidence of irrevocable changes in China through its economic transition and the inevitable transparency of an era of Social Media.

What was it over? The investigation into the murder Neil Heywood, in which Bo’s wife Gu Kailai was strongly implicated? The rise of an opportunist princeling, who had turned a city with the population the size of Canada’s into a massive personal springboard to national fame? It took more than a month from the incident which started all this, the dramatic flight of Bo’s former ally and police chief Wang Lijun to the nearest US consulate, to the removal of Bo as Chongqing chief. Another few weeks elapsed until Bo was dismissed from the politburo. Obviously Wang’s allegations against his former boss had to be investigated. But there must also have been one big bust-up, as rival party barons settled scores over the seat in the standing committee that Bo will now never occupy.

The fall of Bo tells us about the ability of the communist leadership to manage change. The Brutal factional politics can no longer be concealed behind a screen. It is duplicated in real-time all over millions of them. The second is that, whether or not Bo’s fall was accidental or triggered by forces outside Chongqing, the myth that the grey, collective, consensus-led leadership can carry on business as usual has been temporarily dented, if not permanently shattered. The next generation of leaders faces such massive that it patently cannot carry on business as usual. Third, Bo’s rise and fall came amid a steady crescendo of debate about the need for reform, political as well as economic.

Through Western Eyes

I have drawn mostly on the excellent Guardian coverage of the breaking story. More information and video links can be found through the [US] lonedaysite. However, I am conscious of the perils of reporting only through the Western media sources. Through western eyes, accounts have the density of a John le Carré political novel and with a dash of Lewis Carroll.

Acknowledgement

The image of Bo and Gu is from www.wantchinatimes.com where it is attributed to an internet photograph.


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