Sun, Aug 25, 2013 - Page 9 News List

Bo Xilai trial shines light on business ally’s ties to CCP elite

Businesspeople in China succeed by having close political ties, and when one goes down, the other is likely to follow

By David Barboza  /  NY Times News Service, SHANGHAI

His relations with the Wen family also extended into business.

In about 1999, Xu’s company began making deals with Sino-Diamond, a Chinese diamond company that was partly controlled by Wen Jiabao’s relatives. Around the same time, Xu invested in a Dalian diamond mine and in Jiaxing Carbon Fiber, another company partly controlled by Wen family members, according to shareholder records. (Xu also served on the Jiaxing’s board of directors with Wen Yunsong.)

Xu also moved into finance. In 2000, he helped found Sino-Life Insurance with a group of companies partly owned by Wen’s brother-in-law and his mother. Sino-Life later hired Wen Yunsong’s company as its information technology supplier, according to interviews with people familiar with the deal.

Insurance stakes, including a large public offering holding that he acquired in China Pacific Insurance, became the cornerstone of Xu’s fortune. Forbes estimated that he was China’s eighth-wealthiest businessman in 2005.

Nevertheless, early on, he came under pressure to explain his ties to the Wen family. In 2002, the Far Eastern Economic Review published an article saying that Xu was the son-in-law of Wen Jiabao.

He responded with a terse letter to the editor of the publication, saying: “I am not Vice Premier Wen [Jiabao]’s son-in-law. I have no personal relationship with Wen or his family.”

The letter was not accurate, but it reflected the delicacy of political and business relationships even in the early days of China’s economic boom.

Xu and Wen eventually broke off their relationship, people familiar with the couple say. By most accounts, Xu began drifting closer to Bo Xilai, his longtime patron from Dalian, who had moved to Beijing as minister of commerce, before being named party boss of Chongqing in 2007.

When Bo Xilai was detained in March last year, it was only a matter of time before Xu was also facing detention, given his extensive ties.

“Xu Ming’s case made some people nervous,” Chen said. “But it wasn’t a watershed. Xu Ming was too tied to Bo Xilai, and many businessmen didn’t like Bo Xilai.”

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