THE top leader in Shanghai was dismissed yesterday for corruption, becoming the most powerful Chinese Communist Party official to be purged in more than a decade. Chen Liangyu’s removal also signalled an important power play by President Hu Jintao.

The Politburo decided to relieve Mr Chen of his posts after he was placed under investigation by the party’s anti-corruption watchdog. He was also removed from the powerful ruling body. The booming metropolis has become the face of China’s race to modernise.

The dismissal of the 59-year-old veteran party secretary, who has run Shanghai for four years, is not only a move by Mr Hu to demonstrate his determination to tackle corruption but is a crucial gambit to assert his control over a city that has been the powerbase of Jiang Zemin, his predecessor and chief rival, for almost 20 years. The President is in a hurry to consolidate his power before a party congress next year that is his chance to manoeuvre his loyalists into top jobs.

Mr Chen was accused of being involved in the misuse of social security funds in China’s financial hub and of helping to enrich crony firms and relatives. At the case’s heart is the diversion of at least one third of a 10 billion yuan (£670 million) city pension fund for illicit investments in real estate, roads and expressway tolls.

Two senior city government officials, including a former secretary to Mr Chen, have already been taken in for questioning and three prominent executives in real estate, private investment and a utility firm have been implicated.

The move will be hugely popular, adding to the President’s quiet campaign to portray himself as a leader who places the concerns of the poor and those who have benefited less from economic reform at the heart of his policymaking.

Mr Hu used the announcement of Mr Chen’s disgrace to emphasise the party’s commitment to clean government. The 24-member Politburo agreed that “those who violate party discipline and state law will be seriously held accountable and severely punished, no matter who they are or how high their position”. Mr Chen could face a long prison term, although he is unlikely to receive the death sentence. He is the most senior leader to fall since Chen Xitong was dismissed as Mayor of Beijing in 1995 on similar charges. The former mayor was sentenced to 16 years’ jail in a move interpreted as an attempt by the President then, Jiang Zeming, to show the extent of his control. He was released this year on medical parole.

Mr Hu will want to ensure that he has a free hand to begin shifting his protégés into place before a plenum of the party’s central committee next month. That meeting is crucial to enable the President, and party chief, to lay the groundwork for a five-yearly party congress next year when he will endeavour to promote his favourites and possibly anoint a successor.

The erosion of the power of rivals in Shanghai is vital. The post of Shanghai party chief is a stepping stone to higher office and one of the most powerful local government jobs.

Joseph Cheng, the director of the Contemporary China Research Centre at City University of Hong Kong, said: “Sacking Chen shows that Jiang has no power to protect his protégés and is in no position to affect the choice of new leaders.”

Several members of the Politburo’s powerful standing committee may now be vulnerable. These include the head of parliament, Wu Bangguo, officially ranked No 2 in the party; the Deputy Prime Minister, Huang Ju, No 6; and the Vice-President, Zeng Qinghong, who was the former President’s closest adviser. All are seen as part of the former President’s “Shanghai gang”.

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