Econintersect: Family members of Chinese Premier Wen Jiabao claim that the ‘hidden riches’ described in a New York Times article 25 October 2012 simply “do not exist.” Attorneys for family members The New York Times website in China has been blocked since the article appeared. Bloomberg, who published a related story about wealth accumulation in families of top government officials on 29 June 2012, had their website blocked immediately and the site remains blocked.
Note: A number of other western websites also have run afoul of the Chinese censors: YouTube, Google+, Twitter, Dropbox, Facebook and Foursquare are all banned permanently.
The New York Times article that is causing all the furor collected information from public records in China and made the following claims:
- Wen’s mother has investments in her name and one is shares in a large Chinese gfinacial services company that had a value of $120 million five years ago.
- Wen’s wife, son, daughter, younger brother and brother-in-law and their immediate family members have controlled assets worth at least $2.7 billion.
- The ownership has been hidden behind “layers of partnerships and investment vehicles involving friends, work colleagues and business partners.”
An excerpt from the lengthy NYT article:
Untangling their financial holdings provides an unusually detailed look at how politically connected people have profited from being at the intersection of government and business as state influence and private wealth converge in China’s fast-growing economy.
Unlike most new businesses in China, the family’s ventures sometimes received financial backing from state-owned companies, including China Mobile, 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 Mr. Wen’s relatives accumulated shares in banks, jewelers, tourist resorts, telecommunications companies 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 well-known “Bird’s Nest”; and Ping An Insurance, one of the world’s biggest financial services companies.
Statements from China include this from the South China Morning Post:
“Some reports smear China and have ulterior motives,” Foreign Ministry spokesman Hong Lei said in response to a question about the report.
Here is an image of the translation of the statement by the Jiabao family attorneys that appeared in the South China Morning Post:
The NYT has responded in an article Sunday (28 October 2012):
The statement was not a sweeping denial of the article. The statement acknowledged that some family members were active in business and that they “are responsible for all their own business activities.”
While the statement disputed that Mr. Wen’s mother had held assets, it did not address the calculation in the article that the family had controlled assets worth at least $2.7 billion.
Eileen Murphy, a spokeswoman for The Times, expressed confidence in the article. “We are standing by our story, which we are incredibly proud of and which is an example of the quality investigative journalism The Times is known for,” she wrote in an e-mail.
The exposé‚ by Bloomberg in June provided similar detailed analysis of the public records in China that involved family members of the incoming premier Xi Jinping. That family has not taken the steps that Wen’s family has.
Billions in Hidden Riches for Family of Chinese Leader (David Barboza, The New York Times, 25 October 2012)
Beijing denounes NYT report on Wen family wealth (Agence France-Presse in New York, 26 October 2012)
Statement from lawyers of Premier Wen Jiabao’s family obtained by Sunday Morning Post (South China Morning Post, 28 October 2012)
Chinese Premier’s Family Disputes Articles on Riches (Keith Bradsher, The New York Times, 27 October 2012)
Wen family threatens lawsuit over NYT story (Simon Rabinovitch, Financial Times, 28 October 2012)
BBC Report: China Blocks Bloomberg and Businessweek Sites (GEI News, 30 June 2012)