Red Roulette

An Insider's Story of Wealth, Power, Corruption, and Vengeance in Today's China

Desmond Shum

• Publisher: Scribner
• Year: 2021
• ISBN:
  9781982156176
• Topic: Business
• Subtopic: International Business
• Index: Business

"THE BOOK CHINA DOESN'T WANT YOU TO READ." —CNN? SELECTED AS A BEST BOOK OF THE YEAR by THE ECONOMIST and FINANCIAL TIMES This "powerful and disturbing" (Bill Browder, author of Red Notice ) New York Times bestseller is narrated by a man who, with his wife, Whitney Duan, rose to the top levels of power and wealth—and then fell out of favor. Whitney had been disappeared four years before, but this book led to her dramatic reemergence. As Desmond Shum was growing up impoverished in China, he vowed his life would be different. Through hard work and sheer tenacity he earned an American college degree and returned to his native country to establish himself in business. There, he met his future wife, the highly intelligent and equally ambitious Whitney Duan who was determined to make her mark within China's male-dominated society. Whitney and Desmond formed an effective team and, aided by relationships they formed with top members of China's Communist Party, the so-called red aristocracy, he vaulted into China's billionaire class. Soon they were developing the massive air cargo facility at Beijing International Airport, and they followed that feat with the creation of one of Beijing's premier hotels. They were dazzlingly successful, traveling in private jets, funding multi-million-dollar buildings and endowments, and purchasing expensive homes, vehicles, and art.But in 2017, their fates diverged irrevocably when Desmond, while residing overseas with his son, learned that his now ex-wife Whitney had vanished along with three coworkers.This vivid, explosive memoir shows "how the Chinese government keeps business in line—and what happens when businesspeople overstep" ( The New York Times ) and is a "singular, highly readable insider account of the most secretive of global powers" ( The Spectator ).

CHAPTER ONE

FROM MY BACKGROUND, THERE WAS little reason to believe that I’d find myself at the nexus of economic and political power in China at the turn of the twenty-first century. I wasn’t born into the red aristocracy—the offspring of the leaders of the elite group of Communists who seized power in China in 1949. Far from it. My personality also didn’t seem suited for the role.

I was born in Shanghai in November 1968 into a family split between those who’d been persecuted after China’s Communists came to power and those who hadn’t. According to Communist doctrine, my father’s side belonged to one of the “five black categories”: landlord, rich peasant, counterrevolutionary, bad element, and rightist. Before the Communist revolution of 1949, my ancestors were landlords. They were doubly damned if you factor in the additional charge of having relatives overseas. Anywhere else in the world these would be marks of distinction, but in China of the 1950s and 1960s, economic success and international connections meant you were, as the Communists said, “born rats.” The family’s lowly status prevented my dad from attending better schools and saddled him with a grudge against the world that he’d carry all his life.

My father’s people were landowning gentry from Suzhou, a small city in the Yangtze River delta known as the Venice of China thanks to its luxurious gardens and picturesque canals. Family legend has it that as Communist forces advanced in 1949 in their civil war against the Nationalist Army of Chiang Kai-shek, the Shum clan dumped its valuables down a well on the family compound. That land was subsequently expropriated by the Communist government and today is the site of a state-owned hospital. At a reunion years ago, an elderly relative gave me a very specific location and tried to convince me to dig up the family treasure. Seeing as China’s government considers everything under the earth to be state property, I demurred.

My grandfather on my father’s side was a prominent lawyer in Shanghai before the revolution. As the Communists tightened their grip on the nation, he, like many of the well-off, had a chance to flee. But my grandfather balked at the prospect of becoming a lowly refugee. To him, Hong Kong, a favored destination for migrants from Shanghai, could never compare with his home city, then known as the Paris of the East. Buying into Communist propaganda that the Party would partner with members of the capitalist class to build the “New China,” he decided to stay.

My father never forgave his dad for that fateful decision, holding that his naive belief in the Party cost my dad his youth. In 1952, Party authorities shut down my grandfather’s law firm and drove the whole family, including my father’s two brothers and a sister, out of its three-story row house in Shanghai, which Grandpa had purchased with gold bars before the revolution. My grandfather took everyone back to Suzhou. Everyone, that is, except my dad, who, at ten years old, was directed to stay in Shanghai to finish grade school.

The next few years were difficult. My father bounced between a series of relatives, scrounging meals and a place to sleep. He often went to bed hungry. One uncle was particularly kind to my dad, even though the revolution hadn’t been kind to him. Before the Communist takeover he’d been a successful businessman. The Communists took over his company and assigned him a job as a rickshaw driver at one of the factories he’d owned. The Communists were masters at that kind of treatment, designed to destroy a man’s most prized possessions—his dignity and self-respect.

As the scion of a capitalist lawyer’s family in a Communist country, my father learned to keep his head down. Living on his own made him resilient and taught him to survive. Still, his troubles only strengthened his anger at his father for keeping the family in China.

Growing up hungry and alone in Shanghai instilled in my dad a fear of forming deep connections with those around him. He hated owing anyone anything and just wanted to rely on himself. That same outlook was instilled in me, and, even today, I’m still uncomfortable feeling indebted. Only later, after I met the woman who’d become my wife, would I learn how isolating this can be. In the ebb and flow of life, if you’re never beholden to anyone, Whitney would say, no one will ever be beholden to you and you’ll never build deeper relationships. Although I spent years fearing my father, I now see him as a lonely figure who battled the world alone.

My father’s disapproved-of class background made it impossible for him to attend one of China’s better colleges. Instead, he was assigned to a teachers’ training school in Shanghai where he majored in Chinese. Tall for his generation, over six feet, my dad starred on the school’s volleyball team. His dogged industriousness and his athleticism must have caught my mother’s eye. The two met at the teachers’ college in 1962. My mother was also attractive, tall for a Chinese woman—five-eight—and also an athlete; she ran track. Outfitted in drab Mao suits and captured without an iota of expression in the postage-stamp-size black-and-white snapshots of the day, they still made a handsome couple.

My mother’s family had overseas connections, but she and her relatives in China dodged persecution. My maternal grandfather hailed from Guangdong Province near Hong Kong. Like many southern Chinese clans, his family had spread across the world. Seven brothers and sisters had immigrated to Indonesia, Hong Kong, and the United States. Before the Communist revolution of 1949, my mother’s father had shuttled between Hong Kong and Shanghai, managing businesses in both cities. At one point in the late 1940s, he represented the ownership in negotiations with a workers’ representative from the Shanghai Toothpaste Factory named Jiang Zemin. Jiang would ultimately rise to become the head of the Communist Party in 1989 and China’s president in 1993. When the Communists took over Shanghai in 1949, my mother’s family moved to Hong Kong, but after a falling-out with my grandfather, my grandmother returned to Shanghai with the three children, including my mom. The couple never divorced, however, and my grandfather supported my grandmother by wiring money back to China until the day he died.

My mother’s family didn’t suffer under Communist rule. After the 1949 revolution, the Chinese Communist Party used families like my mother’s as a source for foreign currency and to break the Cold War trade embargo that the United States had slapped on China. The Party called these families “patriotic overseas Chinese,” a signal to authorities inside China to go easy on those relatives who’d stayed behind. At one point, the Communists asked my grandfather to run the Hong Kong subsidiary of China’s state-owned oil company, the China National Petroleum Corporation.

My grandmother on my mother’s side was a character. A beauty in her youth, she came from a wealthy family from the coastal city of Tianjin, which before the Communist revolution had been the commercial and trading hub of northern China. Ensconced in a Shanghai row house, which that side of the family never lost, she rose each morning at 4:00 for calisthenics at a nearby park, bought a cup of soybean milk and a youtiao, a cruller-shaped piece of fried dough, for breakfast, and retired to her home to smoke—rare for a woman in those days—and play solitaire. Supported by my grandfather’s remittances from Hong Kong, she never worked a day in her life and had servants even during the darkest days of the Cultural Revolution, when people who’d been educated in the West were murdered by the thousands for the crime of favoring Western ideas like science, democracy, and freedom. My grandmother escaped unscathed, shielded by the aura of her association with “patriotic overseas Chinese.”

My grandmother remained outgoing and popular into old age. I loved going to her place on weekends. She’d grind her own sesame seeds into a tasty paste and serve up platters of steamed baozi, softball-size dumplings stuffed with meat and vegetables, a specialty of her hometown, Tianjin.

My mother had a far happier childhood than my father. Like my grandmother, my mother was a gregarious sort. She was popular among her schoolmates and possessed a sunny view on life. Her personality was almost the polar opposite of my dad’s, especially when it came to risk. My mother embraced it; my dad shunned it. My mother later developed uncannily good investment instincts that allowed my parents to ride real estate booms in both Hong Kong and Shanghai.

In 1965, with the Party’s permission, my parents married. Party authorities assigned them jobs as teachers at different secondary schools. That’s what happened back then. The Party controlled everything. You couldn’t pick your own job or your wedding day. At Xiangming Secondary School in Shanghai, my dad taught Chinese and English, which he’d learned by listening to lessons on the radio. He also coached the girls’ volleyball team and they regularly contended for the Shanghai municipal championship. All those years of being careful paid off when the school’s Party committee named my father a “model teacher.”

My mother’s school was an hour’s bike ride from home. She taught math and was beloved by her students. One reason was her diligence; the other was that she was adept at looking at things from other people’s point of view. My father was a my-way-or-the-highway type of guy. My mother was more flexible. This quality came in handy when teaching math, especially in Chinese secondary school, where the curriculum becomes demanding. Her ability to see problems from a student’s perspective allowed her to better guide them to a solution. She also was a voice of moderation as political campaigns rolled through the school and students and teachers attacked one another for ideological transgressions. During mass criticism sessions when a student was singled out, my mother would step in and end the confrontation before it got too violent. No other teacher at the school dared do that. But my mother’s status as the daughter of a “patriotic overseas Chinese” gave her some cover to help. Her actions were like tossing a rope to a drowning person, a good deed her students never forgot. To this day, they still hold reunions.

My mother was the second of three children, wedged in between two boys. After my parents married, my uncles mocked my mom for choosing a man descended from one of the lowly “five black categories.” They never let my dad forget that they were of an exalted status and had more money, courtesy of the monthly stipend from Grandpa in Hong Kong. One of my uncles bought the first motorcycle in his neighborhood with that cash and made sure my dad knew about it.

I was born in the middle of the Cultural Revolution. The Party sent my parents to the countryside to learn from China’s peasants, a program thought up by Chairman Mao that destroyed the lives of millions of people and ended up driving China’s economy into a ditch. My parents and I were lucky that we never lost our permits to live in Shanghai, unlike hundreds of thousands of Shanghai residents who were exiled to China’s version of Siberia, never to return. My parents’ schools allowed them to take turns living among China’s peasants, so I was never alone.

I was born big and grew fast. I was worthy of my Chinese given name, Dong, which means “pillar.” My size—I top out at six-five—and athleticism made me a natural leader among my peers. My parents also cultivated in me a love of reading. From my earliest days, I had the best collection of comics about Chinese mythical figures, the heroes of China’s Communist revolution, and China’s war against Japan. Raised on stories of Xiao Gazi, a kid who picked up a gun to kill Japanese invaders during World War II, I was naturally patriotic—and fond of storytelling. My gang of friends would crowd around to hear me recount those tales. I’d make others up as I went along. I still remember concocting a madcap adventure about a cave opening up to swallow the motorcade of a Chinese general.

Those comics, full of stories of people sacrificing themselves for the motherland and the Communist revolution, nurtured in me a deep love of China. They set the tone for my later life and fed a belief that I, too, should devote myself to building China. I was taught to see China as a great country, and to believe in its promise.

In Shanghai, we lived in the same house that Communist authorities had expropriated from my dad’s father in 1952. It was an English-style row house on a lane off Huaihai Middle Road, a main boulevard in the old French Concession, a leafy district that before the revolution of 1949 had been administered by civil servants from Paris as part of France’s imperial empire. The Communists often directed erstwhile property owners to live in a small corner of their old home, again a deliberate tactic to demonstrate the awesome power of the state.

We were allotted two rooms on the second floor. A doctor and his family occupied my grandfather’s old living room on the first floor. The doctor had studied in England before the revolution and his flat overflowed with foreign medical journals. A family of distant relatives lived above us on the third floor. All ten people in the house shared a bathroom and a kitchen. One of Shanghai’s premier bakeries was located around the corner and at all hours the tantalizing smell of baked bread wafted down our lane.

My parents slept on a double bed in one corner of our room. I had a single bed in another. A chest of drawers separated us. A small desk with our prized possession—a radio—was next to my bed. My father spent hours perched on a stool in front of it learning English. When my parents were downstairs cooking, I set aside my homework to tune into shows about Chinese heroes of the past, listening with equal intent to the narrator and for the footsteps of my parents ascending the stairs. They wanted me to buckle down on my studies. Like many Chinese children, I was a latchkey kid. I came home by myself at lunchtime and made myself lunch. At an early age, I threw together breakfast, too.

Angry with his lot and nursing his resentments, my father took his unhappiness out on me. He’d pull me into the middle of the room under a flimsy fluorescent light hanging by two wires from the ceiling to beat me mercilessly, with belts, or the back of his hand, or a rock-hard wooden ruler. Actually, I was a model child. I was one of the first in my class let into the Little Red Guard, a selective children’s organization sanctioned by the Chinese Communist Party. I’d been appointed a class proctor and recognized as a natural leader. But my dad didn’t care. He beat me anyway.

One day I forgot a homework assignment. Chinese teachers are very assiduous when it comes to informing parents of their children’s miscues. That evening, my father thrashed me as if there were no tomorrow. The wife of the doctor downstairs heard my yelps, walked up the stairs, knocked on our door, and quietly asked my father to knock it off. He stopped. My parents respected that family, especially because the doctor had studied in the West. His wife turned out to be my savior. Each time that my father lunged for me, I prayed that my screams would get her to climb the stairs.

My parents told me that I actually had it pretty good. Other parents punished their kids by making them kneel for hours on a ridged washboard, which split the skin on their knees. I’m not convinced. I still have nightmares about these beatings. I wake up in a cold sweat with my heart racing. My father and I have never had a reckoning about the past. He never gave a hint that, retrospectively, he was regretful about handling me so roughly.

While she protected her students at school, my mother never afforded me the same courtesy. Instead, she expressed her disapproval, not with beatings, but with words. Well into my thirties, she’d often remark that I was “dumber than a herd of livestock and denser than a bunch of vegetables.”

“Stupid birds need to start flying early,” she’d tell me, stressing that if I was going to make something of myself, I’d need to work a lot harder than other kids.

So, at home, I grew up in an environment of degradation and punishment. Compliments were as rare as eggs were at the time. My parents picked on me for my mistakes. “Don’t get cocky,” my mother said every time I tasted a little success. Eventually, most of my interactions with my parents became attempts to avoid criticism rather than win praise. It wasn’t about embracing achievement. It was about escaping failure. I constantly worried that I wasn’t good enough.

At that same time, from an early age I experienced this yawning gap between the world outside my home, where I was recognized as a leader, a raconteur, an athlete, even a nice person, and the world of our tiny flat, where my parents seemed thoroughly disappointed with me. Perhaps this is common among kids from China, where expectations are high and criticism constant, and where parents believe that children learn by failure, not through success. As I matured, the tension grew between these two worlds.

I’ll always feel grateful to my parents, however, for helping me to read early and read a lot. Both knew exactly what kind of books would enthrall me. They started me with comic books. I soon graduated to wuxia xiaoshuo, the martial arts novels of the type that would inspire director Ang Lee’s hit film Crouching Tiger, Hidden Dragon.

Growing up an only child in a society where at the time everyone had siblings, I spent a lot of time alone. So I read. The martial arts books, like the Harry Potter stories of today, pulled me into an imaginary universe filled with complicated relationships in the courts of kings, life-and-death struggles, love and hate, rivalry and revenge, plots and schemes. My favorite tales followed a similar trajectory. A child witnesses the murder of his parents. Misery follows as he begs for food and struggles to keep himself warm in the winter as he’s chased by his assailant, who is intent on wiping the child’s family from the face of the earth. Lost in the wilderness, he stumbles into a cave to find an itinerant monk who teaches him the secrets of wushu. After years of hardship, he returns home, exacts revenge, and unites the empire’s martial artists to bring peace to all those under heaven. I saw myself in this story, battling and beating my own demons.

My elementary school was located near the Jinjiang Hotel, one of Shanghai’s most famous pre-1949 landmarks and, at the time, one of only two hotels in the city that accommodated foreign travelers. Our proximity to the Jinjiang meant that the city’s Propaganda Department often organized groups of foreigners to tour the school. The Chinese Communist Party divided the world into enemies and allies and, to win support internationally, aggressively cultivate...