Leaked records reveal offshore holdings of China’s elite
Close relatives of China’s top leaders have held secretive offshore companies in tax havens that helped shroud the Communist elite’s wealth, a leaked cache of documents reveals.
The confidential files include details of a real estate company co-owned by current President Xi Jinping’s brother-in-law and British Virgin Islands companies set up by former Premier Wen Jiabao’s son and also by his son-in-law.
Nearly 22,000 offshore clients with addresses in mainland China and Hong Kong appear in the files obtained by the International Consortium of Investigative Journalists. Among them are some of China’s most powerful men and women — including at least 15 of China’s richest, members of the National People’s Congress and executives from state-owned companies entangled in corruption scandals.
PricewaterhouseCoopers, UBS and other Western banks and accounting firms play a key role as middlemen in helping Chinese clients set up trusts and companies in the British Virgin Islands, Samoa and other offshore centers usually associated with hidden wealth, the records show. For instance, Swiss financial giant Credit Suisse helped Wen Jiabao’s son create his BVI company while his father was leading the country.
The files come from two offshore firms — Singapore-based Portcullis TrustNet and BVI-based Commonwealth Trust Limited — that help clients create offshore companies, trusts and bank accounts. They are part of a cache of 2.5 million leaked files that ICIJ has sifted through with help from more than 50 reporting partners in Europe, North America, Asia and other regions.
Since last April, ICIJ’s stories have triggered official inquiries, high-profile resignations and policy changes around the world.
Until now, the details on China and Hong Kong had not been disclosed.
The data illustrates the outsized dependency of the world’s second largest economy on tiny islands thousands of miles away. As the country has moved from an insular communist system to a socialist/capitalist hybrid, China has become a leading market for offshore havens that peddle secrecy, tax shelters and streamlined international deal making.
Every corner of China’s economy, from oil to green energy and from mining to arms trading, appears in the ICIJ data.
Chinese officials aren’t required to disclose their assets publicly and until now citizens have remained largely in the dark about the parallel economy that can allow the powerful and well-connected to avoid taxes and keep their dealings secret. By some estimates, between $1 trillion and $4 trillion in untraced assets have left the country since 2000.
The growing onshore and offshore wealth of China’s elites “may not be strictly illegal,” but it is often tied to “conflict of interest and covert use of government power,” said Minxin Pei, a political scientist at Claremont McKenna College in California. “If there is real transparency, then the Chinese people will have a much better idea of how corrupt the system is [and] how much wealth has been amassed by government officials through illegal means.”
Top-level corruption is a politically sensitive issue in China as the country’s economy cools and its wealth gap continues to widen. The country’s leadership has cracked down on journalists who have exposed the hidden wealth of top officials and their families as well as citizens who have demanded that government officials disclose their personal assets.
In November, a mainland Chinese news organization that was working with ICIJ to analyze the offshore data withdrew from the reporting partnership, explaining that authorities had warned it not to publish anything about the material.
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“relatives of China’s top leaders have held secretive offshore companies in tax havens that helped shroud the Communist elite’s wealth”
keep in mind i dont know much about the ICIJ and if its legit and bona fide..it probably is..i believe the story and its machinations..china will be blamed (wether thats deserved or not) for the next big fall on the markets..this wont cause it but it may contribute in soem way..we cant trust the numbers coming out of there..and they are only doing what the experts have shown them (USA/UK) when it comes to laundering and hiding money from the tax man..
“Top-level corruption is a politically sensitive issue in China as the country’s economy cools and its wealth gap continues to widen.”
this also shows that every country and society has a rich upper class..even the so called communist ones..