Chinese President Xi Jinping's extensive anti-corruption campaign claimed another victim, but this case may be about more than fraud or abuses of power. Zhang Yue, the head of Hebei province's Political and Legal Affairs Commission, came under investigation for corruption April 16. Chinese news outlets reported that he was linked with the former vice minister of the country's intelligence service who was arrested last year. Allegedly, Zhang used his position as the head of Hebei's law enforcement and judicial apparatus to arrest and sentence business rivals of his associates.
Corruption charges against one provincial official could signal a move by Beijing to push economic restructuring, which includes shutting down overcapacity in heavy industry. Even though Zhang's expertise centered on security and judicial affairs, as part of the committee he would have had input on Hebei province's economic policy. This would include the degree to which it implemented Beijing's policies to curb heavy industry, which often has high overhead costs and yields low profit margins.
Hebei is a major center for China's heavy industries, especially steel. It contributes 23 percent of China's total steel production. But Beijing plans to slash steel production by 150 million metric tons over the next five years, and Hebei is likely to bear a tremendous share of those cuts. Local employment at steel plants, often the economic pillars of particular towns and villages, will suffer most, to say nothing of other economic and social upheaval resulting from these measures. And in fact, upheaval has already begun: Labor protests erupted in Hebei this year and continue to break out frequently. Workers are being furloughed, and there has been no sign of any central government funds being disbursed as part of the $15 billion assistance package unrolled by Beijing at the beginning of 2016. Anecdotal evidence suggests that many workers have not even heard of the program.
Overall, there appears to be a concerted effort to remove members of the Hebei provincial standing committee, intimidate the rest and perhaps appoint officials friendly to Xi's interests to key positions. Similar purges targeted at other standing committees resisting Beijing's economic policies could occur. After all, a similar investigation into the head of the Political and Legal Affairs Committee in Liaoning province, another area of tremendous industrial overcapacity, has already begun.
