PRINCELINGS HIDE WEALTH
New information disclosed this week reveals that many Chinese “princelings” — children of Communist Party and military leaders — are using secretive offshore tax havens to hide massive fortunes of the elite.
A report published Tuesday by the International Consortium of Investigative Journalists and Canada’s CBC News is based on leaked financial records exposing overseas financial activities.
Confidential files show that high-level party officials, including relatives of President Xi Jinping, identified companies used by the princelings, including corporations in the Cook Islands and British Virgin Islands used by two relatives of former Premier Wen Jiabao.
The report identified Mr. Xi’s brother-in-law, Deng Jiagui, as half owner of a Virgin Islands company. Mr. Deng is a real estate developer and investor in metals used in cellphones and other electronics.
The involvement of Mr. Xi’s family in shady overseas finances that allow the elite to avoid taxes and hide their wealth is likely to undermine his effort to stem corruption throughout China.
One princeling was identified as China’s “power queen” — Li Xiaolin, daughter of former Premier Li Peng. Ms. Li was linked in the documents to two Virgin Islands companies.
Fred Bild, Canada’s ambassador to China from 1990 to 1994, was quoted in the report as saying the exposure of the ruling elite’s foreign finances “could incense ordinary citizens in China, where senior Communist officials used to enjoy a modestly better living but nothing close to the extravagant wealth required to stash money offshore.”
The report said 22,000 Chinese are stashing hidden wealth abroad, including 15 of China’s richest people, members of the National People’s Congress and senior leaders of state-run industries.
The report also revealed that relatives of five of the seven members of the Politburo Standing Committee, the collective dictatorship that rules China, have companies in the Cook Islands or British Virgin Islands.
Contact Bill Gertz at @BillGertz.