HONG KONG, Sept 17 (Reuters Breakingviews) - In 2017 “Whitney” Duan Weihong, one of China’s wealthiest women at the time, disappeared from her Beijing offices without a trace. For years nobody knew whether she was alive or dead until her ex-husband Desmond Shum told reporters she had called him in early September, begging him not to publish his book. He pushed the button anyway. “Red Roulette: An Insider""s Story of Wealth, Power, Corruption, and Vengeance in Today""s China” is a story of the dysfunctional yet profitable relationship between China’s red aristocracy and the country’s nimble, rapacious private firms. Shum’s tale is replete with warnings, devoid of heroes, and full of political dynamite.Like so many entrepreneurs who rose to vast wealth after Chairman Deng Xiaoping began liberalising the Chinese economy in the 1980s, Shum and Duan hailed from ordinary backgrounds. They met in Beijing during business negotiations, and according to Shum their marriage was the pragmatic conclusion to a business school analysis of their compatibility. Duan’s singular ability to charm senior officials helped propel them into the financial stratosphere. “We were like the fish that clean the teeth of crocodiles,” as Shum puts it.Their favorite crocodile was Zhang Beili, wife of Wen Jiabao, then China’s premier. “Auntie Zhang” helped the couple acquire a stake in Ping An Insurance (601318.SS), (2318.HK) for $12 million, which they sold for a $300 million profit. They also got a piece of Bank of China’s (601988.SS), (3988.HK) listing in Hong Kong in 2006. They funded their investments with as much debt as possible: “If you weren’t fully leveraged, you were falling behind. If you weren’t fully leveraged, you were stupid.”Register now for FREE unlimited access to Reuters.comRegisterThough it’s impossible to verify much of the juicy gossip about China’s political elite that Shum repeats, he is a plausible witness. He and Duan were ostentatious symbols of the excesses of China’s gilded age, although Shum describes the Ferraris, the $100,000 wine bills in Paris restaurants and the constant flow of gifts for connections as necessary expenses to convince potential partners that the couple had the pull to deliver on projects.But as ordinary people realised the extent to which government officials were collaborating with Party “princelings” and private companies to loot public resources, trust in China’s Communist Party plunged. Worried elders elevated Xi Jinping, who upon becoming president launched an anti-corruption campaign that purged the bureaucracy and made examples of a few famous miscreants.That began Duan’s fall from grace. A 2012 New York Times investigation alleging the Wen family had accrued billions in hidden wealth put an end to Auntie Zhang’s utility. At the same time Duan miscalculated in cultivating Sun Zhengcai, a rising Party star once seen as a potential successor to Xi, who was taken down around the time Duan vanished.Shum concludes that what once seemed the beginning of a tidal wave of reform was the peak of a high tide that is now receding. Basking in economic success, the CCP feels free to swat down entrepreneurs who know too much, like Duan, or talk too much, like Alibaba (9988.HK) founder Jack Ma. It is telling that officials are now attacking industries that have minted so many “commoner” billionaires: property, online services, entertainment and private education. While Xi’s campaign to shrink China’s wealth gap may be necessary to restore the CCP’s credibility as a social equalizer, the book suggests it will steer around the princeling class because the corruption crackdown largely did. That could end up further concentrating wealth and power in the hands of a few families.The private sector will not necessarily shrink. But as the Party takes golden shares in private companies, and parachutes bureaucrats onto their boards, the voices of entrepreneurs will be muffled. That comes at a cost. For example, Shum claimed he wanted to concentrate on building value at the Beijing airport logistics hub he had established. But as officials who had backed the project were swept up in Xi’s anti-corruption campaign, he sold out. “I came to believe that in China, a long-term business model wouldn’t work … If you invest $1 and you make $10, you take $7 out and invest $3. But if you keep $10 in, chances are you’ll lose everything.”This attitude has frustrated China’s economic policymakers for years, but the government’s current posture is sure to make it worse. The blurring pace of change, the public humbling of private sector champions like Ma, and the overnight destruction of entire industries like after-school tutoring, can only make private capital more risk-averse, deterring investment and research.Xi wants to discipline the private sector, not destroy it. But constant floggings seem more likely to yield stagnation than competitiveness. China may come to miss the dirty little fish that kept the crocodiles clean.Follow @petesweeneypro on TwitterCONTEXT NEWS- “Red Roulette: An Insider""s Story of Wealth, Power, Corruption, and Vengeance in Today""s China” was published by Scribner on Sept. 7.Register now for FREE unlimited access to Reuters.comRegisterEditing by Peter Thal Larsen and Katrina HamlinBreakingviewsReuters Breakingviews is the world""s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.