Family of Communist China’s Premier has massive wealth: NYT report

China's Premier Wen Jiabao waves during the European Union-China summit at the Egmont Palace in Brussels September 20, 2012. REUTERS/Laurent Dubrule

Thu Oct 25, 2012 11:37 pm EDT

(Reuters) – The family of Chinese Premier Wen Jiabao, a leader known for his humble roots and compassion for ordinary Chinese, has accumulated massive wealth during his time in power, the New York Times reported on Friday.

“A review of corporate and regulatory records indicates that the prime minister’s relatives, some of whom have a knack for aggressive deal-making, including his wife, have controlled assets worth at least $2.7 billion,” it said.

The Times’ websites in English and Chinese were blocked in China on Friday morning, and searches for the New York Times as well as the names of Wen’s children and wife were blocked on China’s main Twitter-like microblog service.

Wen’s mother, siblings and children have amassed the majority of the wealth since Wen was named vice premier in 1998, the Times reported. Wen was promoted to the premiership in 2003.

Giving one example, the Times said partnerships controlled by Wen’s relatives and their friends and colleagues held up to $2.2 billion in stock in Ping An Insurance (Group) Co of China Ltd in 2007, the last year those stock holdings were disclosed in public documents.

Wen’s 90-year-old mother had one investment in Ping An that was worth $120 million five years ago, the newspaper added.

The Times said it presented its findings to the Chinese government for comment. The Foreign Ministry declined to respond. Members of Wen’s family also declined to comment or did not respond to requests for comment, the Times said.

The Foreign Ministry and State Council – China’s cabinet, of which Wen is nominally the head – did not immediately respond to Reuters’ requests for comment.

The private lives of Chinese leaders as well as their assets are kept under wraps, with personal details considered state secrets.

Still, cases against lower-level officials, often exposed by Chinese media, and reports on senior officials by western and Hong Kong news organizations, underscore the extent to which those with power profit from their standing.

Occasionally, top officials are caught and prosecuted.

In the biggest political scandal in China in decades, now-disgraced senior party leader Bo Xilai, whose wife was convicted of corruption and murder in August, has been expelled from the party and stands accused of corruption, bribery and sexual promiscuity.

Bo was expelled from China’s parliament on Friday and is expected to stand trial in the near future.

The extended family of Xi Jinping, China’s current vice president who is expected to be named head of China’s Communist Party next month and president of the country in March, has also amassed great wealth, according to an earlier news report.

Xi’s relatives have investments in companies with assets of $375 million, and an 18 percent indirect stake in a company with $1.7 billion in assets, Bloomberg news reported in June.

Bloomberg’s website has been blocked in China since that report was published, underscoring the sensitivity of the Party and government towards such revelations about top leaders.

In the case of Wen and his relatives, the names of family members “have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners,” the New York Times said.

It said Wen’s family’s holdings include a villa development project in Beijing, a tire factory in northern China, a company involved in building some of the venues for Beijing’s 2008 Olympics including the “Bird’s Nest” main stadium, and Ping An Insurance, one of the world’s largest financial services companies.

Wen’s younger brother has a company that was awarded more than $30 million in government contracts and subsidies for waste water treatment and medical waste disposal in some of China’s biggest cities, and controls $200 million in assets in a number of companies, the Times said, basing its estimate on government records.

The Chinese public has a fondness for Wen, who is often referred to as “Grandpa Wen” in the media, for his common touch with ordinary Chinese, and his penchant for rushing to console victims of disasters, such as earthquakes and major accidents.

(Reporting by Terril Yue Jones and Sabrina Mao in BEIJING; Editing by Michael Urquhart and Dean Yates)

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BBC

The New York Times says access to its website is being blocked inside China after it published an investigation into wealth accumulated by relatives of Chinese Premier Wen Jiabao.

In its report, the paper said Mr Wen’s family members “have controlled assets worth at least $2.7bn (£1.7bn)”.

Holdings included property, insurance and construction firms, it said.

Both the NYT’s Chinese and English sites are blocked, as are references to the report on micro-blogging sites.

“Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership,” the newspaper wrote in a lengthy report.

“In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners.”

The family’s investments reportedly spanned several sectors. The newspaper cited one holding as Ping An, an insurance company which it said had benefited from reforms enacted in 2004 by a state body over which Mr Wen had oversight.

It said that partnerships controlled by Mr Wen’s relatives, along with their friends and colleagues, had bought into the firm before its IPO, or stock market flotation, in 2004, and held as much as $2.2bn in the company in 2007.

The newspaper said both the Chinese government and Mr Wen’s relatives declined to comment on the investigation, which was based on corporate records from 1992-2012.

No holdings were found in Mr Wen’s name, it said, nor was it possible “to determine from the documents whether he recused himself from any decisions that might have affected his relatives’ holdings, or whether they received preferential treatment on investments”.

China is sensitive about reports on its leaders, particularly when it comes to their wealth.

A growing wealth gap is causing public discontent, as are the frequent corruption scandals involving government officials.

When, in June 2012, a Bloomberg investigative report examined the finances of the relatives of president-in-waiting Xi Jinping, the company’s website was blocked in China – even though the report said there was no indication of wrongdoing by him or his family.

Mr Wen has been the Chinese premier for almost 10 years. He is due to step down in a power transition that begins on 8 November.

He is seen as a popular figure with the common touch, and is portrayed in state media as a leader with great concern for the lives of ordinary people.

A spokeswoman for New York Times said she hoped that full access to the websites would be “restored shortly” in China.

BBC World News was also blocked when a correspondent was asked about the story during a report.
On China’s Twitter-like weibo platforms, keywords such as Wen Jiabao and the New York Times are blocked. Mr Wen’s name, like most other Chinese leaders, has always been a screened keyword.

Some netizens did manage to post the article despite heavy and rapid censorship. A Sina Weibo user tweeted about the article from Kawagoe city in Japan, but his post was removed after 11 minutes.

“The Twist Your Waist Times says the best actor has $2.7bn of assets. I just wonder how will he spend it?” asked a Tencent Weibo user registered in the British West Indies territory of the Turks and Caicos Islands.

“Twist your waist” in Chinese characters sounds like New York when spoken, while “best actor” refers to Mr Wen, who critics say only pretends to be a people-first leader.

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Analysis

image of John Sudworth
John SudworthBBC News, Shanghai

Often referred to as “Grandpa Wen” by state media, the premier is one of the few senior Chinese politicians with the popular touch, usually the first to appear at the side of victims of earthquakes or other disasters as a kind of consoler-in-chief. But there have long been rumours that his decade in the job has brought more tangible benefits to his immediate family, and now the New York Times has put a figure on it.

The more than $2.7bn in controlled assets reported by the newspaper are held not by the Chinese premier himself, but by his wife, mother, siblings, children, and their in-laws. The figure though may not come as much of a shock to Mr Wen. A WikiLeaks cable dated 2007 quoted a source as saying the premier was “disgusted” by his family’s activities.

But whether he disapproves or not, the investigation shows that much of the wealth has been accumulated in areas of the economy over which he has direct authority. Mr Wen is not the only senior leader over whom that kind of suspicion lingers, but given his position, his public standing and his own championing of the anti-corruption cause, the Times report will be seen by the authorities here as highly sensitive and potentially damaging.

Bloomberg’s website is still being blocked after it published, back in June, a similar expose of the family wealth of the man tipped to be China’s next leader, Xi Jinping. It may be a while before readers in China get to see the New York Times online again.

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Wen Jiabao

Became premier in March 2003, charged with overseeing the economy
Portrayed in state media as a man who cares for the public
Began career in provincial geology bureau but was quickly promoted
Seen as a economic reformist critical of Bo Xilai’s “Chongqing model” and “Red” policies
Is ‘Grandpa Wen’ as nice as he seems?

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