Xi Jinping Millionaire Relations Reveal Fortunes of Elite
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Xi Jinping Millionaire Relations Reveal Fortunes of Elite
By Bloomberg News - Jun 29, 2012 1:02 PM GMT+0530
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Xi Jinping, the man in line to be China's next president, warned officials on a 2004 anti-graft conference call: "Rein in your spouses, children, relatives, friends and staff, and vow not to use power for personal gain."
As Xi climbed the Communist Party ranks, his extended family expanded their business interests to include minerals, real estate and mobile-phone equipment, according to public documents compiled by Bloomberg.
Those interests include investments in companies with total assets of $376 million; an 18 percent indirect stake in a rare- earths company with $1.73 billion in assets; and a $20.2 million holding in a publicly traded technology company. The figures don't account for liabilities and thus don't reflect the family's net worth.
No assets were traced to Xi, who turns 59 this month; his wife Peng Liyuan, 49, a famous People's Liberation Army singer; or their daughter, the documents show. There is no indication Xi intervened to advance his relatives' business transactions, or of any wrongdoing by Xi or his extended family.
While the investments are obscured from public view by multiple holding companies, government restrictions on access to company documents and in some cases online censorship, they are identified in thousands of pages of regulatory filings.
The trail also leads to a hillside villa overlooking the South China Sea in Hong Kong, with an estimated value of $31.5 million. The doorbell ringer dangles from its wires, and neighbors say the house has been empty for years. The family owns at least six other Hong Kong properties with a combined estimated value of $24.1 million.
Standing Committee
Xi has risen through the party over the past three decades, holding leadership positions in several provinces and joining the ruling Politburo Standing Committee in 2007. Along the way, he built a reputation for clean government.
He led an anti-graft campaign in the rich coastal province of Zhejiang, where he issued the "rein in" warning to officials in 2004, according to a People's Daily publication. In Shanghai, he was brought in as party chief after a 3.7 billion- yuan ($582 million) scandal.
A 2009 cable from the U.S. Embassy in Beijing cited an acquaintance of Xi's saying he wasn't corrupt or driven by money. Xi was "repulsed by the all-encompassing commercialization of Chinese society, with its attendant nouveau riche, official corruption, loss of values, dignity, and self- respect," the cable disclosed by Wikileaks said, citing the friend. Wikileaks publishes secret government documents online.
A U.S. government spokesman declined to comment on the document.
Carving Economy
Increasing resentment over China's most powerful families carving up the spoils of economic growth poses a challenge for the Communist Party. The income gap in urban China has widened more than in any other country in Asia over the past 20 years, according to the International Monetary Fund.
"The average Chinese person gets angry when he hears about deals where people make hundreds of millions, or even billions of dollars, by trading on political influence," said Barry Naughton, professor of Chinese economy at the University of California, San Diego, who wasn't referring to the Xi family specifically.
Scrutiny of officials' wealth is intensifying before a once-in-a-decade transition of power later this year, when Xi and the next generation of leaders are set to be promoted. The ouster in March of Bo Xilai as party chief of China's biggest municipality in an alleged graft and murder scandal fueled public anger over cronyism and corruption. It also spurred demands that top officials disclose their wealth in editorials in two Chinese financial publications and from microbloggers. Bo's family accumulated at least $136 million in assets, Bloomberg News reported in April.
Revolutionary Leader
Xi and his siblings are the children of the late Xi Zhongxun, a revolutionary fighter who helped Mao Zedong win control of China in 1949 with a pledge to end centuries of inequality and abuse of power for personal gain. That makes them "princelings," scions of top officials and party figures whose lineages can help them wield influence in politics and business.
Most of the extended Xi family's assets traced by Bloomberg were owned by Xi's older sister,Qi Qiaoqiao, 63; her husband Deng Jiagui, 61; and Qi's daughter Zhang Yannan, 33, according to public records compiled by Bloomberg.
Deng held an indirect 18 percent stake as recently as June 8 in Jiangxi Rare Earth & Rare Metals Tungsten Group Corp. Prices of the minerals used in wind turbines and U.S. smart bombs have surged as China tightened supply.
Yuanwei Group
Qi and Deng's share of the assets of Shenzhen Yuanwei Investment Co., a real-estate and diversified holding company, totaled 1.83 billion yuan ($288 million), a December 2011 filing shows. Other companies in the Yuanwei group wholly owned by the couple have combined assets of at least 539.3 million yuan ($84.8 million).
A 3.17 million-yuan investment by Zhang in Beijing-based Hiconics Drive Technology Co. (300048) has increased 40-fold since 2009 to 128.4 million yuan ($20.2 million) as of yesterday's close in Shenzhen.
Deng, reached on his mobile phone, said he was retired. When asked about his wife, Zhang and their businesses across the country, he said: "It's not convenient for me to talk to you about this too much." Attempts to reach Qi and Zhang directly or through their companies by phone and fax, as well as visits to addresses found on filings, were unsuccessful.
New Postcom
Another brother-in-law of Xi Jinping, Wu Long, ran a telecommunications company named New Postcom Equipment Co. The company was owned as of May 28 by relatives three times removed from Wu -- the family of his younger brother's wife, according to public documents and an interview with one of the company's registered owners.
New Postcom won hundreds of millions of yuan in contracts from state-owned China Mobile Communications Corp., the world's biggest phone company by number of users, according to analysts at BDA China Ltd., a Beijing-based consulting firm that advises technology companies.
Dozens of people contacted over the past two months wouldn't comment about the Xi family on the record because of the sensitivity of the issue. Details from Web pages profiling one of Xi Jinping's nieces and her British husband were deleted after the two people were contacted.
The total assets of companies owned by the Xi family gives the breadth of their businesses and isn't an indication of profitability. Hong Kong property values were based on recent transactions involving comparable homes.
Identity Cards
Bloomberg's accounting included only assets, property and shareholdings in which there was documentation of ownership by a family member and an amount could be clearly assigned. Assets were traced using public and business records, interviews with acquaintances and Hong Kong and Chinese identity-card numbers.
In cases where family members use different names in mainland China and in Hong Kong, Bloomberg verified identities by speaking to people who had met them and through multiple company documents that show the same names together and shared addresses.
Xi Jinping Millionaire Relations Reveal Fortunes of Elite - Bloomberg