NY Times blocked in China as it reveals Wen Jiabao’s obscene family wealth

I remember when Wen Jiabao first became prime minister. There were such high hopes, and they’ve never really abated: Wen has always been seen as “the good CCP leader.” As if by magic, he was always on the scene as tragedies struck, be they earthquakes or floods or winter storms in Guangzhou at Chinese New Year time or high-speed rail crashes. And there was something genuine about the Man of the People, the one who cared about China’s disenfranchised. And maybe he really does care. He would have to be a damned good actor if he didn’t.

But whether he cares or not, it still looks like there’s a dark side to his story. Today China blocked the NY Times after it delivered a bombshell story: Wen’s family members have made billions — yes, billions — of dollars through investments in family ventures and the awarding of contracts. Needless to say, something doesn’t smell right here. Is it conceivable that Wen simply didn’t know, or that he knew and was disgusted by the corruption but felt powerless to control it?

Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership, an investigation by The New York Times shows. A review of corporate and regulatory records indicates that the prime minister’s relatives, some of whom have a knack for aggressive deal-making, including his wife, have controlled assets worth at least $2.7 billion.

In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners. 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.

There was something so simply good about Wen (or the way the media portrayed him), almost saintly. He was, ironically, a crusader against corruption and he was always positioned as the one who had “the people’s interests” at heart. This story delivers a crushing blow to such a carefully crafted image. Either Wen was implausibly ignorant or implausibly impotent, unable to stop his family from exploiting his position.

This is a remarkable story. It is one of the best-researched stories on China I’ve ever seen. It is exhaustive, and by simply relaying the facts it is utterly devastating. This is Pulitzer material, and I don’t say that very often. No wonder the NY Times is blocked in China today. I would be shocked if it weren’t.

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Richard Burger is the author of Behind the Red Door: Sex in China, an exploration of China's sexual revolution and its clash with traditional Chinese values.

The Discussion: 69 Comments

” A few people have been pouring filth on Chongqing (Mum) and me and my family”. Bo before fall from grace.

Say no more.

October 29, 2012 @ 8:53 am | Comment

I recommend reading the Epoch-Times link, but I don’t believe their story. If Mr. Barboza’s colleagues, too, had been offered a planted story, they wouldn’t silently watch the New York Times basking in the fame now. As I wrote above – Falun Gong and the politbureau appear to have a common interest in this case to protect Wen.

KT, I was wondering about the place where Wen or his family would take legal steps (if at all, because they haven’t flatly announced any yet), too. New York? Beijing? Shanghai?

Interesting times.

October 29, 2012 @ 1:30 pm | Comment

Btw, I don’t think that Wen will “fall from grace”, – unless he seriously mishandles this case (which he or his family might do). But these stories could diminish his influence after retirement, and during his last few months in office. And the choreographers of the 18th CCP national congress won’t be amused either.

October 29, 2012 @ 1:37 pm | Comment

I mean this sort of shit is par for the course once you hit the Central Committee.

Sigh…

October 29, 2012 @ 2:06 pm | Comment

@JR. If Wen authorized that legal statement, he clearly has taken leave of his senses. To take the next step – court – irrespective of the jurisdiction would open a floodgate.

Just imagine the leaks to the media, and not just by the NYT, and you cannot rule out a knock on effect bringing his colleagues and their financial affairs into the spotlight.

Political assassination within the power elite by media leak. Once that boundary is transgressed a few times, it becomes par for the course, with little concern that it could bring the whole house of cards down.

Now if a member of Wen’s extended family initiated this letter, it just points to a family adrift and the fact that Wen is no longer in control of his household ie he is a lousy Confucian patriarch, and so should be put out to pasture asap.

Just look at the Bo chain of events, each more colorful than its predecessor.

Or maybe I have a fevered imagination.

October 29, 2012 @ 5:09 pm | Comment

“I mean this sort of shit is par for the course once you hit the Central Committee.

Sigh…

What, so there’s a relatively uncorrupt layer sandwiched between corrupt local government and the corrupt central committee? Again, this smacks of the “everyone in the PRC government is corrupt except the people I hob-nob with at AmCham, who are, of course, all decent folk” mentality.

RE: This story being planted. Well, the NYT acknowedledged a tip-off in their report:

““In the senior leadership, there’s no family that doesn’t have these problems,” said a former government colleague of Wen Jiabao who has known him for more than 20 years and who spoke on the condition of anonymity. “His enemies are intentionally trying to smear him by letting this leak out.” “

However they also detailed the lengths they went to to investigate and confirm this report through auditors. The NYT deserve kudos for their investigation of this subject and bringing the ball home on this. The idea that all they did was play stenographer or relay a story that other outlets didn’t want to touch has no basis – instead they appear to have suceeded in turning a tip-off into a confirmed story here.

October 29, 2012 @ 5:49 pm | Comment

KT, I’d probably agree with you if there was a strong political will in China’s leadership to oust Wen Jiabao. But there’s no need to oust him, as he’s leaving anyway, and ic no political will at the top to give him the Bo-Xilai treatment. I’m finding it hard to assess how many Chinese citizens will be “reached” by this story, but I don’t epect it to be particularly destabilizing. Some Chinese people will feel that there’s no good uncle at the top after all. Alright then. In that case, this case suggests that all of them are rather nasty uncles, and you still can’t mess with them.

I believe that fear plays a much greater role in supporting the CCP’s rule than most discussions would suggest. People won’t take to the streets in their hundreds of thousands against Wen Jiabao. They only take to the streets if they see possible gains from it, or if their personal lives are seriously affected.

October 29, 2012 @ 11:27 pm | Comment

One more thing: Wen Jiabao has probably had quite a share in Bo Xilai’s fall from power. Let’s assume for a moment that Barboza really got crucial help from Bo supporters to access the information).

In that case, Wen may be furious now, but would still enter the same “opportunity costs” (damage to his personal reputation) once again, if he had to choose.

Also, the belief that Bo had to go prevailed at the top. For whatever reason it did: Zhongnanhai wouldn’t have arranged all these potentially destabilizing shows if no big stuff had been at stake.

Did I mention before that I don’t necessarily believe in Gu Kailai’s guilt? I’m not believing in her innocence either, but the preparedness in the Western press to take the verdict against her for real still surprises me.

Can anyone imagine an impartial court acquitting her under any circumstances, once she was arrested and her husband put under house arrest? Oh, please.

October 30, 2012 @ 12:35 am | Comment

“Political assassination within the power elite by media leak. Once that boundary is transgressed a few times, it becomes par for the course, with little concern that it could bring the whole house of cards down.”

@ JR. I wasn’t suggesting that the common folk would have any role to play in this winner-takes-all court intrigue.

Rather, I was thinking of a point made in the Chinalawblog on negotiating tactics. No. 5 – Revenge is a dish best eaten cold.

“Even when it will actually suffer economic damage from its conduct, it may still focus on obtaining revenge for its defeat. The passage of time makes little difference. Their only concern is on obtaining revenge”.

More importantly: “People who are more vengeful tend to be those who are motivated by power, by authority and by the desire for status. They don’t want to lose face”.
http://www.chinalawblog.com/2012/10/how-to-handle-chinese-negotiating-tactics-part-three.html

Other than that, the western chatterati have got it all wrong. Its really an us-versus- them issue. The Guardian and esp. the Financial Times link provided.
http://www.guardian.co.uk/world/2012/oct/29/china-accuses-wen-jiabao-critics?newsfeed=true

Now, let us get our heads right, okay.

October 30, 2012 @ 4:29 am | Comment

“On Monday afternoon, meanwhile, it emerged that large chunks of the People’s Daily article on The New York Times had been plagiarised from a variety of online sources. Several sections appeared to have been lifted word-for-word from China News Agency stories while other parts had been copied from previous articles in the People’s Daily itself.”

“The Communist party of China and the government and people will eliminate any disruptions and firmly follow the path of socialism with Chinese characteristics.”

Gawd. Can’t we just admit we are dealing with psychopaths?

The Barboza response is illuminating. Has the rumored reception of a “thick bundle of documents” on Wen even been verified by any news agency? I’d like to think Chinese counter-intelligence is more capable than this.

October 30, 2012 @ 8:31 am | Comment

This nytimes report seems to be about as credible as that “devastating document” that revealed Obama was not a US citizen.

October 30, 2012 @ 11:56 am | Comment

@theobserver – If that’s true,then I guess the Wen family won’t have any problems with their law suit, will they? Especially given that the NYT’s information appears to be publicly available data from Chinese regulatory bodies.

October 30, 2012 @ 2:43 pm | Comment

Insider Trading…Chinese style by Peter Lee

http://www.atimes.com/atimes/China/NJ31Ad02.html

October 30, 2012 @ 6:51 pm | Comment

Please. The Lee article is a masterpiece of hand-waving (only the 2.2 Billion in Ping An really matters, apparently), blame-spreading (it’s really Duan’s fault, so the Wens aren’t really to blame), and false equivalence (people on the New York and London stock exchanges engage in hiding the ball, so it doesn’t matter that the family of the guy running a country is doing it). Only a fenqing could try this kind of nonsense and expect people to be convinced by it.

October 30, 2012 @ 10:16 pm | Comment

@66. I’ve come to regard Peter Lee as a sort of “thinking man’s fenqing” — the logic always collapses in the end, but he makes brave and creative efforts to uphold the party line and delivers it in pretty solid prose and while seeming logical.

October 31, 2012 @ 6:03 am | Comment

I’ve come to regard Peter Lee as a sort of “thinking man’s fenqing” — the logic always collapses in the end, but he makes brave and creative efforts to uphold the party line and delivers it in pretty solid prose and while seeming logical.

Please, let’s not resort to even more ad hominems now, shall we?

October 31, 2012 @ 12:23 pm | Comment

Guys, I’m closing this thread — please post to the new Wen Jiabao thread two posts up. Thanks.

October 31, 2012 @ 12:26 pm | Comment

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