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» 07/02/2012
CHINA
Xi Jinping's family is into rare earths, real estate and public contracts for a billion dollars
The relatives of the current Chinese vice president and future president sit on an economic empire with interests in many fields. Xi instead built his career fighting corruption and does not appear to be involved in their business. However, ordinary Chinese are increasingly disgruntled with rich politicians. For the Asian Development Bank's chief economist, "the alliance between the rich and powerful [. . .] makes corruption and inequality self-reinforcing and persistent."

Beijing (AsiaNews) - Vice President Xi Jinping belongs to one of the richest families of China. Mr Xi is set to replace Hu Jintao as the country's president, marking the transfer of power to the Communist party's fifth generation. In an in-depth report censored by China, Bloomberg found that Xi's extended family hold business interests in real estate, publicly traded companies as well as state enterprises, in telecommunications and even rare earths, which are crucial for the electronics industry. Their net worth is estimated to be around US$ 1 billion.

Whilst investments are obscured from public view by multiple holding companies, government restrictions on access to company documents and in some cases online censorship, they can be identified in thousands of pages of regulatory filings. Those interests include investments in companies with total assets of US$ 376 million; an 18 per cent indirect stake in a rare-earths company with US$ 1.73 billion in assets; and a US$ 20.2 million holding in a publicly traded technology company.

The family's fortunes began with the late Xi Zhongxun, a revolutionary fighter who helped Mao Zedong win control of China and was rewarded with top posts in the Communist regime. That makes Xi and his siblings "princelings," scions of top officials and party figures whose lineages can help them wield influence in politics and business.

Most of the Xi family's assets are owned by Xi's older sister, Qi Qiaoqiao, 63; her husband Deng Jiagui, 61; and Qi's daughter Zhang Yannan, 33.

Qi and Deng's share of the assets of Shenzhen Yuanwei Investment Co, a real estate and diversified holding company, totalled US$ 288 million. For her part, Zhang owns US$ 20.2 million in Hiconics Drive Technology Co shares. Deng also owns an indirect 18 per cent stake in Jiangxi Rare Earth & Rare Metals Tungsten Group Corp, a company worth more than US$ 1 billion.

A brother-in-law of Xi Jinping, Wu Long, runs New Postcom Equipment Co, a telecommunications company that just 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.

In addition, the various Xis own high-end real estate across China, including six properties in Hong Kong with a combined estimated value of $24.1 million.

No assets were traced to Xi Jinping; his wife Peng Liyuan, 49, a famous People's Liberation Army singer; or their daughter, the documents show.

There is also no indication that Xi intervened to advance his relatives' business transactions, or of any wrongdoing by Xi or his extended family.

However, in today's China, where the divide between haves and have-nots is ever growing, popular resentment against the wealth of the ruling elite is never far from the surface.

Xi's career is based on fighting corruption. In 2004, he warned officials at an anti-graft conference, "Rein in your spouses, children, relatives, friends and staff, and vow not to use power for personal gain."

As he led anti-graft campaigns in the past three decades, Xi climbed party ranks, joining the ruling Politburo Standing Committee in 2007. Now he is expected to become party general secretary and the country's president at the next party congress in October.

All this might not be enough. Despite China's extraordinary economic growth, wealth and corruption are undermining the one-party state. In the past 20 years, the income gap between rich and poor, urban dwellers and rural residents, has grown exponentially, more than in any other country in Asia.

"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.

On the other hand, the latest generations of Communist leaders are not immune. When Deng Xiaoping said some people could get rich first and help others get wealthy later, the relatives of top officials got involved in business and scandals. For example, Prime Minister Wen Jiabao's son co-founded a private-equity company. The son of Wen's predecessor, Zhu Rongji, now heads a Chinese investment bank.

Since the arrival of the Internet, things have been worse. Many ordinary Chinese expressed disgust last year at a gold Rolex watch worn by a former customs minister. They also castigated the daughter of former Premier Li Peng (aka the butcher of Tiananmen) for wearing a pink Emilio Pucci suit to the nation's annual legislative meeting this March. Some complained that the 12,000 yuan price tag would have bought warm clothes for 200 poor children.

Corruption is no longer swept under the carpet and people are no longer putting up with it. The 'Wukan case' is a case in point. In this village in Guangdong, residents successfully had a corrupt official removed.

For Prime Minister Wen and President Hu Jintao, unless the problem is solved, the survival of the Communist system may not be guaranteed.

"What I'm really concerned about is the alliance between the rich and powerful," said Wan Guanghua, principal economist at the Asian Development Bank. "It makes corruption and inequality self-reinforcing and persistent."


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See also
02/21/2014 CHINA
Communist Party corruption: China's "most fascinating" businesswoman falls from power
04/02/2014 CHINA
Gen. Gu Junshan "corrupt", Xi Jinping’s battle takes on the Army
by Chen Weijun
05/21/2010 CHINA
Beijing admits widespread corruption, 3,000 officials punished
09/03/2007 CHINA
Real estate and womanising greatest sins in Communist Party
02/01/2007 CHINA
More arrests and charges against the ‘Shanghai Gang’

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