Princelings in China amass vast wealth: Report
Evidence is mounting that relatives and wards of current and former Chinese VVIPs have also amassed vast wealth.
New York: As the scandal over the exit of politburo member Bo Xilai continues to reverberate, evidence is mounting that relatives and wards of current and former Chinese VVIPs have also amassed vast wealth.
`Princelings` have also been found to be serving as middlemen to a host of global companies and wealthy tycoons eager to do business in China.
"Wherever there is something profitable that emerges in the economy, they are at the front of the queue," New York Times reported quoting China watchers and experts.
The princelings are into private equity, state-owned enterprises, natural resources and you name it, any venture, the paper said.
Showcasing the instances, the Times said that Jiang Mianheng, the 61-year-old son of Jiang Zemin, the former Communist party leader was a Chinese partner of the Hollywood`s bold move to crack a USD 330 million deal to create a Shanghai animation studio.
The venture has the potential to rival the California shops that turn out hits like "Kung Fu Panda" and the "Incredibles".
Jiang senior is still considered the most powerful kingmaker of China`s last two decades. Younger Jiang`s other business coup include ventures with Microsoft and Nokia and oversights of a clutch of state-backed investment vehicles that have major interests in telecommunications, semiconductors and construction projects.
That a dealmaker like Jiang would be included in an undertaking like that of DreamWorks is almost a given in today`s China. Analysts say this is how the Communist Party shares the spoils, allowing the relatives of senior leaders to cash in on one of the biggest economic booms in history, the Times said.
Young Jiang is not alone, the Times said, Wen Yunsong, the son of Prime Minister Wen Jiabao, heads a state-owned company that boasts that it will soon be Asia`s largest satellite communications operator.
President Hu Jintao`s son, Hu Haifeng, once managed a state-controlled firm that held a monopoly on security scanners used in China’s airports, shipping ports and subway stations.
In 2006, Feng Shaodong, the son-in-law of Wu Bangguo, the party`s second-ranking official, helped Merrill Lynch win a deal to arrange USD 22 billion public listing of the giant state-run bank ICBC, in what became the world`s largest initial public stock offering.
Much of the income earned by families of senior leaders may be entirely legal. But it is all but impossible to distinguish between legitimate and ill-gotten gains because there is no public disclosure of the wealth of officials and their relatives.
Conflict-of-interest laws are weak or nonexistent. And the business dealings of the political elite are heavily censored in the state-controlled news media.
The spoils system, for all the efforts to keep a lid on it, poses a fundamental challenge to the legitimacy of the Communist Party. As the state’s business has become increasingly intertwined with a class of families sometimes called the Red Nobility.
Chinese officials and their relatives rarely discuss such a delicate issue publicly. The New York Times made repeated attempts to reach public officials and their relatives for this article, often through their companies. None of those reached agreed to comment on the record.
A secret US State Department cable from 2009, released two years ago by the WikiLeaks, cited reports that China`s ruling elite had carved up the country’s economic pie. At the same time, many companies openly boast that their ties to the political elite give them a competitive advantage in China’s highly regulated marketplace.
A Chinese sportswear company called Xidelong, for example, proudly informed some potential investors that one of its shareholders was the son of Wen Jiabao, according to one of the investors.