In many ways, Kang Rixin is a model of the senior Party member/corporate executive in today’s China that Richard McGregor describes so ably in his must-read book “The Party: The Secret World of China’s Communist Rulers“:
- Besides holding the business title of General Manager of China National Nuclear Corporation, Kang also was the Party Secretary of the company as well as a member of the 17th Central Committee of the Chinese Communist Party;
- Kang has an EMBA from one of China’s leading universities (often described as “China’s MIT”);
- Profitability was a focus for Kang as GM of CNNC (“From the time I became GM, the company has not loss money and none of its projects has lost money.”).
Oh – and Kang was also typical is less fortunate ways: he was investigated in connection with RMB 1.8 billion ($268,000,000) in bribes in connection with contract awards (a 2007 contract awarded to Areva for construction of a facility in Guangdong is reputed to be involved). In November, he was convicted of having personally accepted RMB 6.6 million in bribes and sentenced to life in prison. And of course, he was expelled from the Central Committee of the CPC as well as ejected from the Party.
Kang’s case has received considerable media coverage in China and part of that may reflect both the heightened risk of malfeasance in this capital-intensive and increasingly important sector, as well as concern about the dangers if China’s nuclear power sector isn’t properly built out.
China is increasing its nuclear power generation capacity at an aggressive rate: as of August, 12 nuclear power reactors were operational with 24 under construction and more scheduled to start soon. The targetted amount of nuclear power generation capability by 2020 is 80 GWe (which would be a 10x increase of current levels). This level of investment won’t come cheap: in September the China Daily reported that Kang’s former company CNNC alone would spend RMB 800 billion (US$120 billion) by 2020 in the development of these new facilities. Nuclear power is a sector that’s already had corruption problems. And, we all know what happens when a nuclear power plant doesn’t work properly (see Chernobyl).
So, the risks of leaving Kang at the head of an organization scheduled to make massive capital investments in a potentially dangerous area were high. And, using an instructive example is often an effective tool for bringing a point home – the Chinese idiom for this is ‘kill a chicken to scare the monkeys’ (杀鸡儆猴); shajijinghou).
Will it work?