Tea Leaf Nation

'I Came to This World Naked'

China's erstwhile No. 2 tries to fend off corruption implications -- and the public isn't buying it.

It hasn't been easy for former Chinese Prime Minister Wen Jiabao. Despite the immense prestige afforded to the person who was China's second most powerful official for 10 years, Wen has found himself and his family put under a microscope in the waning days of his public life.

His family was twice the target of New York Times investigative reports: An October 2012 Pulitzer Prize-winning article alleged that his family had accumulated at least $2.7 billion dollars. (In Oct. 2012, lawyers representing Wen's family reportedly called the story "untrue" and threatened legal action.) A November 2013 follow-up in the same publication then alleged financial dealings between Wen's daughter Wen Ruchun and J.P. Morgan, the U.S. investment bank. (J.P. Morgan has declined to comment to the New York Times on the allegations, but in the wake of investigations was recently reported to have removed itself from a major potential investment in a Chinese chemical company.) And in mid-January, an article in British newspaper The Guardian reported that Wen, in addition to other high Chinese officials, had family members who stored wealth in offshore financial entities. None of the articles implicated Wen himself, but the descriptions of nepotism and corruption have painted Wen and his family in a particularly unflattering light.

Then, Wen struck back -- sort of. On Jan. 18, a columnist from Ming Pao, a major Chinese language newspaper in Hong Kong, published a hand-written letter from Wen to his friend Wu Kangmin, a columnist at the publication. In practiced Chinese calligraphy, Wen claims that he leads the "life of an old retiree" filled with "exercising, reading, and meeting friends." But the note also serves, intentionally or not, as Wen's first public response to the New York Times reports, about which he had previously remained silent. In it, Wen asserts that "I have never and would never abuse my power for personal gain." At the missive's end, Wen writes that he longs to "put a good end to the last leg of my life's journey" and concludes with a flourish: "I came to this world naked, and will leave clean."   

Perhaps not coincidentally, two days later, People's Daily online, a Communist Party outlet, published a feature on Wen's family, and depicted Wen as coming from a long line of earnest and humble educators -- his father was a teacher. Given the political connections of the People's Daily, the feature was likely calculated to complement the publication of Wen's letter.

Indeed, the release of Wen's handwritten response may be deliberately timed to quash rumors and vouch for his good name at a time when president Xi Jinping has stepped up his anti-corruption crackdown, vowing to snare both minor and major officials in its dragnet. Wen has not faced any allegations in domestic media following the New York Times exposés, but he might still be concerned about his fate given that Zhou Yongkang, the former security czar, is reportedly under secret investigation for corruption. 

A schism on the Chinese Internet soon emerged: While other mainstream outlets quickly ran the syndicated People's Daily feature, users of Sina Weibo, China's Twitter, largely lambasted Wen's letter. Many regard it as a clumsy denial: One user wrote, as if to Wen, "Your son is the president of a state-owned company, your mother is rich, and your wife" -- a geologist who has been described as China's "diamond queen" -- sells diamond jewelry. "Shall we think these are all rumors?" 

Online critics have referred to Wen as "China's best actor" for years, accusing him of speaking too much while doing too little. Similar criticisms popped up again this time: One user wrote that "actor" Wen was best when he was  "reciting poetry" or "shedding tears," not making and implementing policy. Another user wrote, "Perhaps Wen hasn't abused his power for personal gain, but he hasn't used his power to limit personal gain either."

To Maoist conservatives, known in China as "leftists," Wen is the avatar of all they stand against, a convenient piñata for their grievances about China today: income disparity, corruption, and most importantly, the ills stemming from a supposed invasion of foreign capital and ideas. Leftist online communities like Cultural Revolution Net or RedChinaCn.net are full of angry and shrill tirades against Wen, which call him things like the particularly nasty hanjian, which means a traitor against the Chinese nation. Wen's attempt at self-defense is likely to change none of this.

A handful of netizens also speculated about any hidden meaning in the letter. One user speculated that it was "a preemptive action." Another replied that Wen's defense "only reveals the truth," and asked, "Does he know something will happen?" Some netizens gave Wen partial credit for talking the talk of a political reformer, which is extremely rare among any Communist Party cadre, especially one at the top echelon of power. He was the Party's go-to man for a visit to disaster zones: Most memorably, he flew to the worst-struck areas of Sichuan province after a Richter scale 8.0 earthquake in May 2012, and worked out of a tent to rally rescuers despite intense aftershocks. One netizen wrote: "At least he dared to call for political reform," making him more likely "to be brought down by political opponents."

Such a fate is still unlikely -- but it does indeed seem more so now than a year ago. Even if Wen remains safe, he faces a more anxious retirement than a man of his standing might normally be expected to endure. 

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Tea Leaf Nation

Fool's Gold

Meet the 'Nu Stars,' the youngsters behind Nu Skin's Chinese subculture.

On Jan. 17, hundreds of young men and women partied in the ballroom of a five-star hotel in Wenzhou, a large city in eastern China. The women were fully decked out in colorful evening gowns, the men in tuxedos. Some sported expensive purses, ornate Venetian-style masquerade masks, or ribbons with the English words "Team Elite." One took to Sina Weibo, a social media platform, to urge her followers to join her: "if you are also a little bit vain, if you feel like you should be the star in your own life." For those ambitious enough, she continued, "next year's spotlight could be on you."

These young Chinese are self-styled Nu Stars, a moniker for salespeople for Nu Skin, a Utah-based health product maker that reportedly made more than 31 percent of its total revenue of $2.16 billion in China, all just in the first nine months of 2013 (fourth-quarter data is forthcoming). The company acknowledged Jan. 16 that it is now under investigation for marketing practices that, according to Chinese state-owned media, involve brainwashing and defrauding these fervent young members of China's wannabe glamour set.

Like Amway and Mary Kay, Nu Skin relies on salespeople peddling products directly to family and friends, while developing new recruits to do the same. This technique has a checkered history in many parts of the world including the United States, but it is particularly fraught in China. In 1998, the Chinese government banned all enterprises employing the practice after a flood of pyramid schemes claimed thousands of victims, but eased the restrictions somewhat in 2005 to allow "direct selling," whereby salespeople earn a commission based on the quantity of products sold, rather than the number of "downlines," an industry term for new enlists. 

U.S. companies with well-developed direct selling cultures, like Amway, Herbalife, and Mary Kay, still boast a significant collective presence in China, albeit with somewhat modified business models that involve opening brick-and-mortar stores and registering salespeople as distributors. But Nu Skin was reportedly more aggressive in its practices, employing salespeople directly and compensating them for downlines. This deviated dangerously from a relatively well-tested gray area, and toward a clear violation of Chinese regulations. On Jan. 21, Nu Skin announced that it would halt recruitment of new distributors in China.  

Rules aimed at direct selling in China are not simply intended to protect consumers from falling prey to pyramid schemes. The ruling Communist Party has historically been extra-vigilant about direct selling because it often involves some forms of mass gathering and indoctrination, which the Party deems to be key factors in developing dissent. Chinese authorities reportedly busted more than 7,600 pyramid schemes involving more than 60,000 people over a three-month period in 2013 in a campaign against direct selling. The hold of these rings on their adherents can be so strong that government interference sometimes lead to unrest: In May 2013, hundreds of people involved in a direct-sales scam confronted police in the central city of Hefei, injuring 32 officers.

Those involved with Nu Skin, however, don’t seem interested in political organizing, just the mirage of success that lies in slickly-packaged beauty products with foreign names like "ageLOC"and "Scion." Over 10,000 user accounts on Sina Weibo have "Nu Skin," "Nu Star" or "ruxin," the Chinese name for Nu Skin, in their handles. The sample is certainly skewed because Weibo, with over 280 million total users, has a youthful demographic. Nonetheless, it is revealing that an overwhelming majority of the Nu Star-labeled accounts are young women in their twenties and thirties. A fair number proudly show off the label "post-90," a common way of referring to young people born after 1990. Many call Nu Skin a "platform for young entrepreneurs," where they can "work hard, play hard." 

Judging from their social media personalities, Nu Stars are a group of Chinese youth aching for recognition, glamour, and freedom -- all in relatively short supply elsewhere in their lives. Even after winning a brutal competition for thankless, low-paying jobs, many young Chinese still struggle to pay rent, support their families, and find extra money to afford the luxury goods that their country's middle class conspicuously consumes. An August 2013 article in Chinese state-owned media cited a police report that concluded that an increasing number of college graduates join pyramid schemes because "they have become frustrated by tough competition in the job market." 

Indeed, the self-motivational quotes about hard work and overcoming obstacles that interlard the large number of online posts from Nu Skin salespeople do not carry the faintest whiff of political dissent. Instead, these young people appear to be desperately searching for a way to climb a social ladder that has become increasingly slippery. The promise of a less-treacherous path to riches -- even one that involves hard work, not just play -- has drawn tens of thousands of Chinese youth looking for somewhere to channel their aspirations. 

Many young Chinese, overwhelmed by the seemingly unattainable material demands that beset their early adult lives, say they have given up trying to meet them. For a brief time, Nu Skin appeared to offer a different path for those determined to fight for what they perceived to be the good life. Self-declared Nu Stars partied, preened, and posed before Nu Skin-branded backdrops as if they were Hollywood royalty on the red carpet. Now it may be time for them to return to a harsher reality.

Fair use/Sina Weibo