Chinese Grow Angry Over Party `Princes' -- Children Of Communist Elite Enjoy Power, Money

BEIJING - "Dragons beget dragons," Chen Xiaotong enjoyed telling his friends.

His father, former Beijing mayor and Communist Party leader Chen Xitong, was a powerful dragon on China's political scene. And Chen Jr., one of the privileged offspring of senior party leaders known as the "princeling faction," played his filial connection for all it was worth.

By the time he was 30, young Chen was figurehead director of two companies and general manager of one of Beijing's biggest hotels. He drove a BMW, entertained hundreds at lavish banquets and hobnobbed with the French ambassador at Maxim's restaurant in Beijing. Foreign business people seeking to meet senior Chinese officials were advised to see him first. His reported price for arranging an audience: $93,000 a shot.

In some ways, the story of a spoiled son taking advantage of his father's position is as old as China.

But the ancient tale takes on new meaning in modern China, where Communist leaders have pledged to root out and destroy all vestiges of hereditary privilege. According to a 1991 Communist Party report, there are 3,000 to 5,000 "taizi" - "princelings" - who enjoy prominent posts in government, the military or state-owned enterprises. Nepotism permeates every level of society. Far from being eliminated, it has taken root in a way that evokes China's imperial past. Unpopular with the people

As a new generation of leaders prepares to take power, the princeling faction represents a political liability capable of arousing mass indignation against the ruling elite.

Because the world of the princelings remains an extremely touchy subject for the Chinese regime, it still goes largely unreported in China.

In a rare exception to this rule, details of Chen's high-rolling life appeared in a recent article in Southern Weekend, a Communist Party newspaper published in Guangdong province. Even that probably would never had been written if his father had not been implicated last summer in a massive corruption scandal and stripped of his party seat.

"The intended message of such articles," said Andrew Nathan, a China scholar at Columbia University, "is that corruption is being caught, exposed, punished; that the authorities under (Chinese President) Jiang Zemin are cracking down; that they are `shocked, shocked' that corruption is going on here.

"However," he added, "an unintended message of such articles is somewhat the opposite: that corruption is the common way of doing business among the higher-ups; that it is very widespread; that this guy got away with it for a long time and a lot of people must have known about it; and that he only gets exposed after his `houtai,' his father, falls from power." It goes all the way to the top

The ranks of princelings reach to the pinnacle of the ruling hierarchy: Deng Pufang and Deng Zhifang, sons of 91-year-old paramount leader Deng Xiaoping, have been involved in controversial high-stakes business dealings involving state firms.

Deng Pufang, 52, partially paralyzed as the result of injuries suffered during the 1966-76 Cultural Revolution, has official status as chairman of the Chinese Federation for the Disabled. Previously, he was involved in a failed state-owned company.

Deng Zhifang, 43, is chief executive of a Hong Kong-based construction company that figured in a major corruption scandal.

A daughter, Deng Nan, 49, is a vice minister in charge of the State Science and Technology Commission. Son-in-law He Ping is director of the People's Liberation Army Armament Department, in charge of money used to buy weapons for the world's largest army.

Chen Yun, the powerful senior leader who died last year, sired perhaps the most powerful princeling of all: His son, Chen Yuan, is deputy governor of the People's Bank of China, the country's central bank. He is often mentioned as the nation's future economic czar. As for Chen Yun's daughter, she heads a major joint-venture state investment firm.

The list goes on. Privilege a sore point

The existence of privileged offspring in China is a constant sore point and one of the main issues that fueled the 1989 democracy protests in Tiananmen Square.

"These people are a new species of large rat who rely on local state enterprises, this great granary, to fatten themselves," said the normally staid Beijing-based magazine Science and Technology Digest said of the party princelings

Sensitive to the smoldering public rage over the emergence of this hereditary privileged class, Communist Party officials periodically announce programs to curb nepotism. Reforms greeted with cynicism

In late January, Wei Jianxing, head of the party's Central Discipline Inspection Commission, issued new directives to prevent spouses, children, friends and relatives of friends from benefiting from official largess.

But such efforts are generally viewed cynically.

"When a man becomes an official," begins an old saying still popular today, "his wife, children, dogs, cats and even chickens fly up to heaven."