The princelings, descendants of the Party's 'Immortals', are China's new masters
Beijing (AsiaNews) - The descendants of eight party founding fathers are sitting on assets worth dozens of billions of dollars. Such a connection between politics and economics undermines the fight against corruption pursued by Xi Jinping and the country's new leaders. At the same time, such concentration of wealth is generating anger and outrage among ordinary Chinese.
A study released by Bloomberg News yesterday, which includes a number of pieces and an interesting graph, maps the breadth and history of China's 'red aristocracy', describing the assets of 103 individuals, all of whom are the direct descendants and spouses of the so-called 'eight immortals', i.e. Deng Xiaoping, Chen Yun, Yang Shangkun, Wang Zhen, Bo Yibo, Li Xiannian, Peng Zhen and Song Renqiong.
These eight are among the founders of the Communist Party who, following Mao Zedong's death, tried to save the country from the economic disaster caused by Mao's policies by opening it up to foreign investments.
At the same time, to prevent the party from losing power, their loyal descendants were chosen to run new state-owned conglomerates. By the 1990s, the latter began investing in real estate, steel and coal. Eventually, they diversified into rare earths and international finance.
Bloomberg's study shows that 26 of their heirs ran or held top positions in state-owned companies that dominate the economy. Three children alone-Wang's son, Wang Jun , Deng's son-in-law He Ping and Chen Yuan , the son of Mao Zedong's economic tsar-headed or still run state-owned firms with combined assets of about US.6 trillion last year. That is equivalent to more than a fifth of the mainland's annual economic output in 2011.
In the 1980s, Wang Jun and He Ping got into the arms industry, selling weapons to Iran, Myanmar, and Pakistan. They also set up a joint-venture with Ferrari, the princelings' favourite car.
At least 43of the 103 ran their own businesses or became executives in private firms. Using family connections and their foreign education, they went to work for banks like Citigroup and Morgan Stanley. Many own or run entities linked to companies registered offshore, many in jurisdictions that offer secrecy, like the Virgin Islands, the Cayman Islands and Liberia.
Although their fathers ostensibly disliked the 'bourgeois individualism" of capitalist nations, at least half of their descendants lived, studied and worked abroad.
At least 23 of their descendants and their spouses studied in the United States, including three at Harvard University and four at Stanford University. At least 18 worked for US entities, and 12 owned property in the US.
For some analysts, the Tiananmen massacre of 4 June 1989 was carried out to stop criticism from Chinese students against the princelings' privileges (visas and funding) to study in the best universities in the world in England and America, at a time when no Chinese could do so. As long-time critic Bao Tong noted, the massacre silenced pro-democracy voices but also anti-corruption critics.
By examining thousands of pages of documents and conducting dozens of interviews, Bloomberg traced the holdings of the Immortals' 103 direct descendants and their spouses, highlighting China's greatest problem, social inequality.
Over the last three decades, Communist China's leaders have claimed that more than 600 million people have been lifted out of poverty; yet they have also built one of the world's most unequal societies.
A recent study shows that China's Gini coefficient is 0.6. This index measures inequality and levels of instability in society. Experts believe that a coefficient higher than 0.4 can lead to social unrest.
In China's case, episodes of social unrest due to corruption of party officials or environmental problems number at least 500 a day.
By releasing the study on China's 'red aristocracy', Bloomberg is sending signals to China's future president, Xi Jinping, that social reforms and the fight against corruption are needed if he wants to stop the rot inside the party and its potential demise.
However, Bloomberg is blocked in mainland China, and Chinese bloggers planning to post the study have been warned that they would be in trouble with the law if they did so.
Already in June, Bloomberg was blocked after it released data on the assets own by Xi Jinping and his family, estimated to be around a billion dollars.