Inside the Seedy, Cutthroat Underbelly of China’s Wealthy Elite

In 2014, the Chinese multimillionaire Desmond Shum marched in the streets of Hong Kong against the pro-democracy Umbrella Movement, making sure he “was seen by representatives from the Hong Kong Liaison Office, the [People’s Republic of China’s] main government body in the city.” Five years later, Shum was one of the million-plus Hong Kongers who took to the streets against Beijing.

It’s common for rich Chinese abroad to discover a sudden passion for democracy and human rights after the Chinese Communist Party has turned against them. But Shum’s account, which he relates in his new book Red Roulette: An Insider’s Story of Wealth, Power, Corruption, and Vengeance in Today’s China, is an unusually honest—though not completely frank—self-examination. It’s also one of the very few insider accounts we have of how things get done at the top in China—though it turns out it’s not that different from how things happen in the middle.

Shum was born into a common strand of the Chinese elite; a once-rich family reduced by Maoism who recovered their wealth through connections, diaspora relatives, and hard graft in the 1990s. He emigrated to Hong Kong with his parents as a child, where they lived in straitened circumstances before becoming rich again through real estate deals.

Red Roulette: An Insider’s Story of Wealth, Power, Corruption, and Vengeance in Today’s China, Desmond Shum, Scribner, 320 pp., $30, September 2021

After studying in the United States, he returned to the mainland in 1994 to work at a private equity firm, ChinaVest, where he rediscovered the “stickiness” of Chinese relationships. As he notes, “every relationship formed among those who work within the Party system in China is saturated by calculations of benefit and loss.”

One of the key themes of the book is the tragedy of those ties: that even the most personal of relationships become shaped by mutual backscratching and favor-trading, and that people invest deep emotions in what should be business relationships. As in Mafia movies, the language of the family is everywhere—and your family will always betray you.

Shum’s real introduction into the circles of power came with his marriage to Whitney Duan, an “independent-minded female entrepreneur,” as he describes her. It was a strategic match: “Aligning our goals constituted her idea of romance,” he writes. But it was also one that required a deep bond in order to manage that strategy. “Navigating human relations in China was such an intricate affair at that level that Whitney needed someone she could trust absolutely with whom she could strategize.”

One of those relationships was key to Duan’s rise—and her fall. Before they got married, Duan took Shum to meet the critical authority figure in her life: Zhang Peili, the wife of China’s then-Premier Wen Jiabao, theoretically the second-most-powerful figure in the party-state. Wen was a moderately popular leader in the 2000s, known for his expressions of concern when visiting disaster victims and occasional calls, never realized, for political reform. His family, meanwhile, was building vast business empires—especially Zhang.

Shum repeatedly claims that Wen was unaware of the scale of his wife’s business. This would be a remarkable feat of innocence, as her empire—and her taste for, and dealing in, diamonds—was hardly secret. (I heard about it from Chinese friends in 2004, the first year I was in Beijing.)

Indeed, as Richard McGregor noted in his 2010 book The Party, Wen took care to cover up his wife’s empire: “Under the watchful eye of the propaganda department, however, Ms Zhang’s business dealings disappear into a black hole. Wen himself takes care never to appear in public with her and the media in China are not allowed to report on her dealings.”

Like many powerful people in China, Zhang had her own court surrounding her. Duan had become a key member of it—because, in part, she was a rarity: a businesswoman. Powerful women in China often build their own ties to each other, because they’re excluded from the stereotypically masculine activities that make up a lot of business bonding.

For Duan, Shum was a partner who could handle that side while she worked to strengthen her ties to Zhang. “With Whitney, [Zhang’s] relationship was also hierarchical, but there was more give-and-take,” Shum writes. “All of Auntie Zhang’s ties were seasoned with a healthy dose of coldhearted calculation and manipulation but also genuine emotion. Whitney and I thought we knew how the game was played. We didn’t fear her.”

Shum had several qualities that made him attractive to Duan—and Zhang—including his connections in Hong Kong and U.S. business circles. But the key factor may have been his looks. Shum is 6-foot-5 (which is remarkably tall in China), handsome, and a former athlete who nearly made the Olympic swim team for Hong Kong. The very wealthy in China have a habit of collecting talent: ping-pong players, calligraphers, fortunetellers, Buddhist masters, top university graduates. Shum slotted right in.

Over the next decade, Duan and Shum became a power couple, rising from the lower echelons of Chinese wealth to the heights of the mega-wealthy thanks to their ability to generate money for their patron, Zhang. “We were like the fish that clean the teeth of crocodiles,” Shum writes.

At first, they were over-leveraged financially—but still living extravagantly, as their position demanded, forcing Shum to borrow money repeatedly from his parents, “$100,000 here, $200,000 there, just to tide us over.” But after they oversaw the expansion of the Beijing airport and got a stake in massive party-backed insurance company Ping An, they reached the stratosphere.

Throughout all this, Shum says, they imagined they were creating a better, more democratic China. They were also, of course, driving Rolls-Royces, buying handcrafted Swiss watches, and living in five-star hotel suites.

But one of the paradoxes of Chinese wealth can be how little you get to enjoy it. As others including the anthropologists John Osburg and Elanah Uretsky have shown, the work of keeping up business and political relationships is exhausting. Shum found himself wooing a constant stream of businesspeople, officials, and gangsters—all of whom want power, money, and sex. “Whitney and I could provide access to power, so we needed to offer less money and arrange for less sex.” (Note that he accurately says “less,” not none.)

He routinely dropped tens or even hundreds of thousands of dollars on gambling, wine, shopping sprees, and restaurant bills for those he’s courting. All this is very familiar from the lower echelons of Chinese business; the sums are just larger. Shum also insists that “Whitney and I had always been careful in our dealings to stay within the boundaries of the law.”

Others were apparently not so careful. Any good Mafia movie has its share of people getting whacked, after all. Shum became friends with airport boss Li Peiying (executed by the government in 2009). Li’s fatal mistake, Shum notes, was “speaking too much.” “The Chinese Communist Party … has its own code of omertà [the Mafia’s code of silence],” Shum added. He got close to Sun Zhengcai (imprisoned for life in 2018), a rising star of the party. He advised Ling Gu (died in suspicious car crash in 2012) and Ling’s father, then-President Hu Jintao’s top aide Ling Jihua (sentenced to life in 2016).

Eventually, it was Duan’s and Shum’s turn in the barrel. A New York Times exposé in 2012 left Duan dangerously exposed—at the same time that their marriage started to fall apart, with Shum resentful at her control of the purse strings (and angry at his discovery that his wife is two years older than him, not three months younger).

Zhang effectively hung them out to dry, despite Duan’s loyalty to her. The rise of President Xi Jinping, meanwhile, brought the gradual elimination of the party factions they had depended on and the renewed dominance of the red aristocracy—those born into the very top levels of party families, not mere gentry like Duan and Shum. But they remained connected even after a bitter divorce in 2015, thanks to a son together—and Shum was shocked when Duan disappeared in 2017.

With this book, Shum has effectively broken the party’s omertà himself. (Duan reappeared in a phone call just before the book came out, warning Shum off publishing it.) There are fascinating—but often second- or thirdhand—accounts of party politics, such as the fall of Bo Xilai, within its pages.

It’s also very well written; in the acknowledgments, Shum notes his writing partner John Pomfret, an experienced China journalist and historian. And it would make a tremendous movie about wealth, power, and oppression in China. It’s a shame that, thanks to that same power and oppression, no one in Hollywood will ever have the guts to make it.