New revelations by an international group of journalists show that members of the Chinese communist elite have used offshore tax havens to stash away billions of dollars over the last decade.
A series of articles published by the International Consortium of Investigative Journalists (ICIJ), based in Washington, D.C., demonstrates how Chinese Communist Party officials and their family members have used countries like the British Virgin Islands and the Cook Islands to set up shell companies in which assets and cash can be secretly held.
ICIJ said that the reports come from a massive set of data it received260 gigabytes, or 160 times the quantity of WikiLeaks cableson a hard drive mailed anonymously in 2012. After laboriously cleaning and processing the data, ICIJ published its first set of articles in early 2013.
It kept back the China portion until now, and said that nearly 22,000 Chinese clients of companies dealing in offshore structures were identified in the files now under discussion. More Chinese names will be published in a database on Jan. 23, ICIJ said.
Not all uses of such offshore companies are illegal, and in many cases corporate lawyers advise their clients to use offshore structures in doing business in China and Hong Kong. The impression gained from the preponderance of evidence discussed by ICIJ, however, is that Chinese elitethe red nobilityhas stashed billions in ill-gotten wealth overseas.
Violators identified by ICIJ include most notably members of the families of Xi Jinping, the current chief of the Chinese Communist Party, Wen Jiabao, the former Chinese premier, and Hu Jintao, the former Communist Party leader, as well as a number of other families with deep Party or military backgrounds.
There are also striking absences from Whos Who of the leaks that the ICIJ compiled.None of the family members of Jiang Zemin, the communist leader before Hu Jintao, and his associatessuch as Zhou Yongkang, the troubled former security czar, and Zeng Qinghong, a former top Party powerbrokerare implicated in the revelations. This faction has been involved in an intense, behind the scenes struggle for power in the Communist Party with Xi Jinping, Wen Jiabao, and Hu Jintao.
The families of Jiang Zemin, Zhou Yongkang, and Zeng Qinghong have controlled Chinas most profitable industries, including petroleum, for over a decade, and are believed to have made huge fortunes for themselves by stealing from those industries.
The anecdotes about the escapades in wealth of the sons of Jiang Zemin and Zeng Qinghong are legendary in China circles. For instance, Zeng Wei, Zeng Qinghongs son, once bought a nearly $30 million house in an exclusive part of Sydney, and sought to knock it down to build his own, with a waterfall.
There is no way to verify the wealth held by these families, but the accounts and anecdotes that have for years circulated about their activities would indicate that they are far wealthier than those exposed in the current leaks.
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Leaks on Offshore Wealth Expose Some of China’s Elite