Billions in Hidden Riches for Family of Chinese Leader
Comment of the Day

October 26 2012

Commentary by David Fuller

Billions in Hidden Riches for Family of Chinese Leader

This topical and informative story by David Barboza for The New York Times is causing quite a stir among China's censors, as you might imagine. Here is the opening:
BEIJING - The mother of China's prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao's political campaigns. And during childhood, "my family was extremely poor," the prime minister, Wen Jiabao, said in a speech last year.

But now 90, the prime minister's mother, Yang Zhiyun, not only left poverty behind, she became outright rich, at least on paper, according to corporate and regulatory records. Just one investment in her name, in a large Chinese financial services company, had a value of $120 million five years ago, the records show.

The details of how Ms. Yang, a widow, accumulated such wealth are not known, or even if she was aware of the holdings in her name. But it happened after her son was elevated to China's ruling elite, first in 1998 as vice prime minister and then five years later as prime minister.

Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership, an investigation by The New York Times shows. A review of corporate and regulatory records indicates that the prime minister's relatives - some of whom, including his wife, have a knack for aggressive deal making - have controlled assets worth at least $2.7 billion.

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. Untangling their financial holdings provides an unusually detailed look at how politically connected people have profited from being at the intersection of government and business as state influence and private wealth converge in China's fast-growing economy.

David Fuller's view China's government has moved swiftly to block this story within the country. However the NYT also has a Chinese language edition, now also blocked, but the article will have already slipped through to some computers within mainland China.


There is nothing new about all this, only that so many details have been revealed. Gaming the system from the top is the oldest practice in politics, and generally considered just deserts by those who enhance their wealth through political power. There are few poor people in the top echelons of any government. However, the greatest abuses are going to occur in totalitarian regimes where there is little free press or genuine rule of law.

Populations are more accepting of these excesses if most people feel that they have opportunities and that their personal circumstances are improving. The problems arise when populations experience declining standards of living and feelings of hopelessness become widespread. This can and has led to unrest and even revolution, and that is what China's rulers fear most of all.

Back to top