PRINCELINGS HIDE WEALTH

The Washington Times Weekly - - Geopolitics -

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.

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