Sat, Oct 27, 2012 - Page 1 News List

Chinese premier’s family has massive wealth: ‘NY Times’

Reuters and NY Times News Service, BEIJING

The family of Chinese Premier Wen Jiabao (溫家寶), a leader known for his humble roots and compassion for ordinary people, has accumulated massive wealth during his time in power, according to a New York Times report yesterday.

The Times said that a review of corporate and regulatory records indicates that the premier’s relatives, some of whom have a knack for aggressive deal-making, including his wife, have controlled assets worth at least US$2.7 billion.

The Times’ Web sites in English and Chinese were blocked in China yesterday 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.

Chinese foreign ministry spokesman Hong Lei (洪磊) told a daily briefing the report “smears China’s name and has ulterior motives.”

Asked why the Web sites were blocked, Hong said: “China manages the Internet in accordance with laws and rules.”

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

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. Unlike most new businesses in China, the family’s ventures sometimes received financial backing from state-owned companies, including China Mobile (中國移動通信), one of the country’s biggest phone operators, the documents show. At other times, the ventures won support from some of Asia’s richest tycoons.

The Times found that Wen’s relatives accumulated shares in banks, jewelers, tourist resorts, telecoms firms and infrastructure projects, sometimes by using offshore entities.

The holdings include a villa development project in Beijing; a tire factory in northern China; a company that helped build some of Beijing’s Olympic stadiums, including the iconic “Bird’s Nest”; and Ping An Insurance (平安保險), one of the world’s biggest financial services companies.

As premier in an economy that remains heavily state-driven, Wen, who is best known for his simple ways and common touch, more importantly has broad authority over the major industries where his relatives have made their fortunes.

Because the Chinese government rarely makes its deliberations public, it is not known what role — if any — Wen, who is 70, has played in most policy or regulatory decisions. However, in some cases, his relatives have sought to profit from opportunities made possible by those decisions.

His younger brother, for example, has a company that was awarded more than US$30 million in government contracts and subsidies to handle wastewater treatment and medical waste disposal for some of China’s biggest cities, according to estimates based on government records. The contracts were announced after Wen ordered tougher regulations on medical waste disposal in 2003 after the SARS outbreak.

In 2004, after the State Council, a government body Wen presides over, exempted Ping An Insurance and other firms from rules that limited their scope, Ping An went on to raise US$1.8 billion in an initial public offering of stock. Partnerships controlled by Wen’s relatives — along with their friends and colleagues — made a fortune by investing in the company before the public offering.

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