WEN JIABAO: CHINA'S GOOD GUY REFORMER AND HIS FAMILY’S HIDDEN RICHES

WEN JIABAO

20111029-China.org wen jiabao.jpg
Wen Jiabao became the Prime Minister of China in March 2003. He succeeded Zhu Rongi and in many cases acted as the public face of China, taking highly publicized trips abroad and making major speeches on issues of the day such as Tibet and the economy. For a technocrat, Wen had a big smile and gregarious nature. He was seen by many as a reformer for publicly advocating for more accountability and speaking out against corruption in China’s Communist-run government. But he often spoke out alone. Without allies, according to the New York Times, Wen became an increasingly isolated voice for reform, unable—or unwilling—to push through his agenda.

Wen was arguably the most member popular of the ruling elite during his time in office. In his role as man of the people Wen he cooked dumplings in drought hit areas of Anhui Province and stopped at the Beijing petitioners office to listen to complaints by people who had their land illegally seized and wages never paid. After he claimed he had read Marcus Aurelius’s Meditations nearly 100 times the work became a top seller in China, reaching No. 5 on the bestseller list. Meditations is a treatise on the Stoic philosophy, extolling the importance of virtue.

Wen was constantly on the move and often photographed in casual clothes. He traveled all over China, often showing up in remote places comforting the poor or talking to ordinary people. He was often the first and highest official to show up at natural disasters. David Barboza wrote in the New York Times: “Wen Jiabao is known for his populist approach. He often races to the scene of natural disasters to comfort survivors. On state-run television, he can be seen eating with the poor and disadvantaged in rural villages. His common touch has even earned him the nickname “Grandpa Wen.”“ [Source: David Barboza New York Times, January 26, 2011]

Tom Phillips wrote in The Telegraph, “Wen Jiabao, nicknamed "Grandpa Wen" because of his reputation for concerning himself with China's poor, stepped down from his position in 2013 but continues to wield influence within the party and has maintained a high public profile since leaving office.The 71-year-old is also known for his interest in education: last October, a collection of his musings on the topic were published under the title: "Wen Jiabao on Education". [Source: Tom Phillips, The Telegraph, June 11, 2014]

Wen Jiabao’s Life and Political Career

null
Wen Jiabao with Zhao Ziyang
at Tiananmen Square
Wen Jiabao was born in 1940 in a the coastal city of Yixingfu, about 50 mile from Beijing. When he was six he fled with his family after Nationalists burned his house to slow the advance of the Communists. After that his family moved to Tianjin, where he attended an elite high school. He earned his university degree at the Beijing Institute of Geology. Wen earned his masters degree about the same time the Cultural Revolution began Like Hu, he was sent to the remote Gansu Province.

Wen was a protege of reformers Hu Yaobang and Zhao Ziyang. Wen is pictured in an iconic photograph of Zhao addressing protesting in Tiananmen Square in 1989. The influential scholar and blogger Wu Jiaxiang told the Washington Post, “He experienced the golden years of Hu Yaobang and Zhao Ziyang, who advocated for reform, especially political reform."

Wen spent 11 years in Gansu, and became so familiar with it he was called the “living map.” In the early 1980s his work caught the attention of his superiors and he was brought to Beijing. After proving himself to be a skillful administrator, in 1986, he was named director of the Central Committee’s General Office

Wen was close to Hu Yaobang and Zhao Ziyang, two reform-minded party members who were ousted for being too supportive of the of the Tiananmen Square protesters. Wen was at Zhao’s side when he spoke to demonstrators at Tiananmen Square. He survived the Deng purge after Tiananmen Square and worked under both Jiang Zemin and Zhu Rongi, overseeing agriculture, anti-poverty efforts and the handling of natural disasters. In 1998, he ignored guidelines and saved thousands of farmers by refusing to blast a dam to divert flood waters away from the city of Wuhan,

Wen Jiabao as Prime Minister

null
Like Hu, Wen presents himself as a “man of the people.” He is comfortable among ordinary workers and farmers. A couple months before taking his job he spent New Years Day 2,500 feet below the earth’s surface eating dumplings with coal miners. He has visited SARS patients at the hospital and shaken hands with AID sufferers.

Wen visited Washington in December 2002 and was welcomed by Bush as a “partner” in diplomacy. In December 2003, he rang the closing bell at the New York Stock Exchange, spoke at the United Nations, and met with Bush again.

Wen provided on the scene direction during the Sichian earthquake in May 2008. He was on the scene of the quake within hours after it occurred and dispensed with normal protocal and was quite open and candid with the media about what had occurred and was happening—generally displaying a style of leadership more often found in democratic countries.

After the 2008 earthquake Wen Jibao became the most popular non-U.S. politician on Facebook (See Below). Wen was officially appointed to his second five-year term at the National People’s Congress in March 2008. He was replaced in November 2012 and officially steps down in 2013.

Isaac Stone Fish wrote in Foreign Policy: Wen Jiabao has been China's premier since 2002, and is a well-liked and sympathetic figure among Chinese liberals. In major appearances, Wen has called loudly for political reform: in his press conference before the sacking of Bo Xilai he even used the word "reform" 70 times. "It's his final days, and I think he's generally playing to history and future generations," says a former high-ranking U.S. official, who met him while serving in the Obama administration. "He has done this often enough, and in language different from others, so that I believe [he's sincere about reform]." Wen, the only member of the Standing Committee to have granted interviews to Western media, has also seemed to benefit the most among the current leadership from the purge of Bo. [Source: Isaac Stone Fish, Foreign Policy, May 30, 2012]

“But Wen's reformist credentials are likely weakened by the business interests of his family. His son Winston formerly ran a private equity firm called First Horizon Capital; he now runs a state-owned satellite company. Wen's wife is thought to be deeply involved in the gem business. Rumors swirled a few years ago in Beijing that the supposed corruption of Wen's family would bring him down; the question now seems to be whether there is any consensus in the Standing Committee for instituting Wen's political reforms. [Ibid]

Wen Jiabao’s Policies and Activities

20111029-China.org wen jiabao doing taiji.gif
doing tai chi
In a speech in March 2004, Jiabao made a rare pitch for accelerated reform, and promised to help the poor, lower taxes for farmers and cut red tape for entrepreneurs. He also vowed to beef up the military and vowed that Beijing would refuse to compromise or make any concessions to Taiwan. He also said “all power of the government is bestowed by the people,” which some interpreted as a hint that democratic reforms were coming.

Wen was placed in charge of a campaign to combat corruption and restrict investment. His reputation was tainted when press stories in 2004 revealed his American-educated son had secured a large stake of the Ping An Insurance Company shortly before it went public on the Hong Kong stock exchange and became valued at $1 billion.

In a speech in March 2006, Chinese Prime Minister Wen Jiabao promised massive social spending on the poor, restive countryside. Wen said “building a new socialist countryside” is a major historic task and said the government would spend $5.2 billion on rural schools, hospitals, crop subsidies and other programs, raising spending in these areas by 15 percent.

In January 2009, during a visit to Britain, a German graduate student called Wen a “dictator” and threw a shoe at him while he delivered a speech on the global economy at Oxford University. The shoe was off target. Wen didn’t need to duck as George Bush did when a shoe was thrown at him in an Iraq press conference. Wen paused for a few second during the incident and then continued with his speech.

Wen Jiabao, the Reformer?

20111029-China.org hu and wen 1980s.jpg
with Hu Jintao in the 1980s
Wen made several calls for reform and liberalization in last months of his term which officially ends in March 2013. In an interview in September 2010 with CNN he stated that “for any government, what is most important, is to ensure that its people enjoy each and every right given to them by the constitution,” which many reform-minded Chinese took as meaning that China would try to live up to its constitutional protections on free speech and democracy. The interview was not published in the domestic media however. Those that tried to publish it were censured.

During a speech in Shenzhen, before the CNN interview, Wen said China must “push forward reform of the political system.” "The wish and will of the people are not stoppable. Those who go along with the trend will thrive, and those who go against the trend will fail," he said. He even repeated late patriarch Deng Xiaoping’s well-known warning against the enemies of liberalization: “Without reform, there is only the road to perdition.”

In his 2010 Government Work Report, Wen he talked about “earnestly safeguarding the people’s democratic rights, particularly their electoral rights, the right to know, the right to participate [in politics], the right to expression, and the right to supervise [the government].”On an Internet chat line he promised to purge corrupt senior officials. According to Cheng Li a researcher at the Brookings Institute Wen told a small group in 2006 that he supported rule of law, public accountability, media freedom, and interpret democracy. Wen has also said he wants Chinese democracy to have its own characteristics which means it could be something very different from Western multiparty democracy.

Wen said he was hopeful that China's next-generation leaders would take on political reform in response to demands from the people and do better than the current leadership. Some analysts have said that Wen has spoken out about reform because he doesn’t care about the consequences and has nothing to lose because his term is almost up and he has been frustrated by a lack of support for reforms. Others feel the whole Wen thing is a charade. The dissent writer Yu wrote wrote a book called China’s Best Actor: Wen Jiabao in which he argued Wen’s public persona was an attempt by the Communist Party to offer a more humane face.

In any case calls for Western-style reforms are not well received in many circles within the Chinese Communist Party. In a speech at the National People’s Congress (NPC) in March 2011, Wu Bangguo, the NPC chief and No. 2 in the Communist Party, pledged never to adopt a Western political model.” Wu—who technically outranks Mr. Wen—ruled out ever adopting a Western political system based on the separation of powers and multiparty elections. "China’s national conditions strongly indicate that we not engage in multi-party rotations of political power, not engage in a diversity if guiding political ideologies...If we waver...the fruits of development that we have already achieved will be lost and the country could even fall into the abyss of civil strife," he said. Each year Wu gives a speech that strikes a similar theme. [Source: New York Times]

Wen Jibao and the Sichuan Earthquake

20111029-China.org wen jiabao 1990.jpg
in the 1990s
After the Sichuan earthquake in May 2008, Wen a graduate of the Beijing Institute of Geology, arrived in the earthquake zone within hours after the quake occurred. He was very visible, visiting devastated areas, talking to experts and comforting survivors. Hu Jintao also made the rounds. He was show rallying relief workers and comforting children.

While on the plane bound for Chengdu, Wen said, “The Communist Party Central Committee and the State Council [Cabinet] have asked officials at all levels to be at the forefront of efforts to deal with aftermath of the earthquake and lead the people in their rescue work.” The headquarter of People’s Liberation Army gave orders to the Chengdu-base army, air fore and armed police to “apply full force and might” in rescuing earthquake victims.” Comparisons were made between the quick response in China and the sluggish response to the cyclone in Myanmar.

Wen showed up in Yushu County in southern Qinghai Province a day after the earthquake there in April 2010 and was shown on television comforting survivors and cradling a child in his arms. In an acknowledgement of Buddhism's importance to the region, Wen chose Taklung monastery for his second surprise visit to the quake zone; clambering up the rubble, before addressing the crowd gathering in its courtyard. “In these rescue efforts, monks have shown a great performance; on many occasions I have seen them saving people,” He said: “Please be assured we will not only save people and restore houses, but will do a good job of restoring your monastery.”

Wen Jibao Visits the Wenzhou Train Crash Site

Wen arrived in Wenzhou five days after the train crash there that killed 41 people in July 2011. He said he arrived so late because of illness. At an hour-long news conference at the site of the crash he promised a transparent investigation and pledged more focus on safety and greater accountability. “Our investigation must affirm our responsibility to the people, whether it was an equipment problem, a management problem, or a production problem,” Mr. Wen said. “We must get to the bottom of this. If there is any corruption exposed in the investigation, we will handle it according to the law, and the consequences will be severe.”

The prime minister credited the nation’s rail industry with tremendous progress, but said, “This incident reminds us that we should pay more attention to safety during high-speed rail construction.” On why he showed up so late the 68-year-old Wen said “I’ve been ill recently, on a sickbed for 11 days...”Today my doctor reluctantly allowed me to travel.”

Although news conferences of top leaders typically are broadcast live, China’s central television network, CCTV stuck to its normal programming throughout the event, prompting some Chinese to question whether the network was censoring the prime minister. Users of Sina Weibo, a microblogging site, kept up a running commentary. One writer questioned how Mr. Wen could have been confined to a sickbed for 11 days when the Chinese news media reported that he attended several meetings with foreign officials and hosted two sessions of the State Council, China’s cabinet. Others defended him.

Although Wen's visit appeared to have gone some way toward salving public anger, many Wenzhou citizens are still furious that the accident happened at all, underscoring the challenge Beijing faces to win back people's confidence. “His job is not easy, with everyone below him being completely incompetent,” read one post, from a woman in Shanghai. Another, from a man in Urumqi, said: “Every time he appears, he looks more aged and tired. There are always disappointing officials who force him to worry more.”

Wen Jiabao Calls for Political Reform in March 2012

In March 2012, Michael Wines wrote in the New York Times: Prime Minister Wen Jiabao issued a sharper and more urgent call for political change in China, warning that the nation risks a return to the chaos of the Cultural Revolution unless the ruling Communist Party overhauls its leadership structure and clears the way for economic reform. But as in his previous statements, Mr. Wen gave scant indication of what political change might entail, and made it clear that what he called China’s ‘socialist democracy’ would evolve in baby steps rather than by sweeping action. [Source: Michael Wines, New York Times, March 14, 2012]

Calls for political reform in China are generally limited to changes within the Communist Party, which is guaranteed absolute rule in the nation’s constitution, and not to greater participation by average citizens. There was little to indicate that Mr. Wen’s remarks stepped outside party orthodoxy. In his last news conference at the annual session of the nation’s handpicked legislature before he steps down as prime minister, Mr. Wen offered cautious responses to a range of questions, on topics from income inequality to unaffordable housing to self-immolations by ethnic Tibetans, that were unusually tough by previous standards.

He also offered the strongest official response yet to the scandal surrounding Bo Xilai, the ambitious party secretary of Chongqing metropolis who spearheaded a much-publicized crackdown on corruption with the city’s police chief at the time, Wang Lijun. Mr. Wen said the government has launched a special investigation of the incident and would report the results to the public. He also said the city’s Communist Party leadership and municipal government “must reflect seriously and learn from the Wang Lijun incident.”

Repeating measures outlined in the government’s annual report on its priorities, released earlier this month, Mr. Wen said leaders are committed to raising the minimum wage, improving education and job opportunities and expanding the nation’s now-limited social safety net. But he also offered a few glimpses at new initiatives, suggesting that the government will impose controls on high incomes, including the salaries and bonuses of executives in state-owned corporations and banks. And he promised to make credit more affordable and available for small and medium private businesses, many of which must borrow at loan-shark rates because they cannot get money from big state-owned banks.

Mr. Wen said financial officials are considering experimental programs to address the credit shortage, and that one may be started in Wenzhou, an east-coast city that is a center of entrepreneurial activity. Addressing China’s skyrocketing real-estate prices, which have made homes beyond the reach even of many middle-class citizens, Mr. Wen said regulators would not back off measures intended to rein in property speculation until housing was again affordable. To ease off, he said, would “cause chaos in the real-estate market.”

Mr. Wen’s sole display of passion was reserved for the issue of political reform, a cause he said he would promote to his last breath. His advocacy has rendered him increasingly isolated within a top leadership that, if anything, has more stubbornly resisted tinkering with the system. In what seemed a message to the next generation of Chinese leaders, he said that political reform had reached a crucial stage, and that stalling or retreating from change “offers no way out.”

“We must press ahead with both economic structural reform and political structural reform, in particular reform in the leadership system of our party and country,” he said. Otherwise, “the gains we have made in this area will be lost, new problems that have cropped up in China’s society will not be fundamentally resolved and such a historic tragedy as the Cultural Revolution may happen again.” Mr. Wen’s demands for change were nevertheless offset by more tepid remarks on its pace and scope. He stressed that China must “develop our socialist democracy in a step-by-step manner” keeping in mind China’s size and circumstances.

Asked when China would let its citizens elect leaders now chosen by the party’s elite, Mr. Wen instead praised the conduct of village elections deemed corrupt and ineffective by some scholars and villagers alike—and expressed hope that citizens might one day elect township and county officials.Calling himself “an old steed,” Mr. Wen also engaged in a bit of self-criticism, apologizing for the mistakes of his 10-year term and adding that “there is still much room for improvement in my work.” “I have the courage to face the people and face history,” he said. “Ultimately, history will have the final say.”

Hidden Riches of Wen Jiabao’s Family

In late October 2012, on the eve of the party congress to formally select China’s new leaders, the New York Times caused a big stir when it published a story that said Wen Jiabao’s family had assets and stashed away money worth at least $2.7 billion. David Barboza wrote in the New York Times, 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, including his wife, have a knack for aggressive deal making—have controlled assets worth at least $2.7 billion.[Source: David Barboza, New York Times, October 25, 2012]

“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. [Ibid]

“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. The holdings include a villa development project in Beijing; a tire factory in northern China; a company that helped build some of Beijing’s Olympic stadiums, including the well-known “Bird’s Nest”; and Ping An Insurance, one of the world’s biggest financial services companies. [Ibid]

“As prime minister in an economy that remains heavily state-driven, Mr. Wen, who is best known for his simple ways and common touch, more importantly has broad authority over the major industries where his relatives have made their fortunes. Chinese companies cannot list their shares on a stock exchange without approval from agencies overseen by Mr. Wen, for example. He also has the power to influence investments in strategic sectors like energy and telecommunications. [Ibid]

“Because the Chinese government rarely makes its deliberations public, it is not known what role—if any—Mr. Wen, who is 70, has played in most policy or regulatory decisions. But in some cases, his relatives have sought to profit from opportunities made possible by those decisions. The prime minister’s younger brother, for example, has a company that was awarded more than $30 million in government contracts and subsidies to handle wastewater treatment and medical waste disposal for some of China’s biggest cities, according to estimates based on government records. The contracts were announced after Mr. Wen ordered tougher regulations on medical waste disposal in 2003 after the SARS outbreak. [Ibid]

Wen Jiabao’s Mother Worth at Least $120 Million

20111029-China.org wen jiabao wenjiabao family 1974.jpg
Wen with his family in 1974
David Barboza wrote in the New York Times; The mother of China’s prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao’s political campaigns. And during childhood, “my family was extremely poor,” Wen, said in a speech last year. But now 90, the prime minister’s mother, Yang Zhiyun, not only left poverty behind, she became outright rich, at least on paper, according to corporate and regulatory records. Just one investment in her name, in a large Chinese financial services company, had a value of $120 million five years ago, the records show. The details of how Ms. Yang, a widow, accumulated such wealth are not known, or even if she was aware of the holdings in her name. But it happened after her son was elevated to China’s ruling elite, first in 1998 as vice prime minister and then five years later as prime minister. [Source: David Barboza, New York Times, October 25, 2012]

“In the case of Mr. Wen’s mother, The Times calculated her stake in Ping An—valued at $120 million in 2007—by examining public records and government-issued identity cards, and by following the ownership trail to three Chinese investment entities. The name recorded on his mother’s shares was Taihong, a holding company registered in Tianjin, the prime minister’s hometown. [Ibid]

“The apparent efforts to conceal the wealth reflect the highly charged politics surrounding the country’s ruling elite, many of whom are also enormously wealthy but reluctant to draw attention to their riches. When Bloomberg News reported in June that the extended family of Vice President Xi Jinping, set to become China’s next president, had amassed hundreds of millions of dollars in assets, the Chinese government blocked access inside the country to the Bloomberg Web site. [Ibid]

“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.”

Wen Jiabao’s Family and Ping An Insurance

David Barboza wrote in the New York Times: “In 2004, after the State Council, a government body Mr. Wen presides over, exempted Ping An Insurance and other companies from rules that limited their scope, Ping An went on to raise $1.8 billion in an initial public offering of stock. Partnerships controlled by Mr. Wen’s relatives—along with their friends and colleagues—made a fortune by investing in the company before the public offering. [Source: David Barboza, New York Times, October 25, 2012]

“In 2007, the last year the stock holdings were disclosed in public documents, those partnerships held as much as $2.2 billion worth of Ping An stock, according to an accounting of the investments by The Times that was verified by outside auditors. Ping An’s overall market value is now nearly $60 billion. Ping An said in a statement that the company did “not know the background of the entities behind our shareholders.” The statement said, “Ping An has no means to know the intentions behind shareholders when they buy and sell our shares.”

“While Communist Party regulations call for top officials to disclose their wealth and that of their immediate family members, no law or regulation prohibits relatives of even the most senior officials from becoming deal-makers or major investors—a loophole that effectively allows them to trade on their family name. Some Chinese argue that permitting the families of Communist Party leaders to profit from the country’s long economic boom has been important to ensuring elite support for market-oriented reforms. [Ibid]

Duan Weihong, a wealthy businesswoman whose company, Taihong, was the investment vehicle for the Ping An shares held by the prime minister’s mother and other relatives, said the investments were actually her own. Ms. Duan, who comes from the prime minister’s hometown and is a close friend of his wife, said ownership of the shares was listed in the names of Mr. Wen’s relatives in an effort to conceal the size of Ms. Duan’s own holdings. “When I invested in Ping An I didn’t want to be written about,” Ms. Duan said, ‘so I had my relatives find some other people to hold these shares for me.”

“But it was an “accident,” she said, that her company chose the relatives of the prime minister as the listed shareholders—a process that required registering their official ID numbers and obtaining their signatures. Until presented with the names of the investors by The Times, she said, she had no idea that they had selected the relatives of Wen Jiabao. The review of the corporate and regulatory records, which covers 1992 to 2012, found no holdings in Mr. Wen’s name. And it was not possible to determine from the documents whether he recused himself from any decisions that might have affected his relatives’ holdings, or whether they received preferential treatment on investments. [Ibid]

Hidden Nature of Wen Jiabao’s Family Holdings

David Barboza wrote in the New York Times, Even so, the business dealings of Mr. Wen’s relatives have sometimes been hidden in ways that suggest the relatives are eager to avoid public scrutiny, the records filed with Chinese regulatory authorities show. Their ownership stakes are often veiled by an intricate web of holdings as many as five steps removed from the operating companies, according to the review. [Source: David Barboza, New York Times, October 25, 2012]

“For much of his tenure, Wen Jiabao has been at the center of rumors and conjecture about efforts by his relatives to profit from his position. Yet until the review by The Times, there has been no detailed accounting of the family’s riches. His wife, Zhang Beili, is one of the country’s leading authorities on jewelry and gemstones and is an accomplished businesswoman in her own right. By managing state diamond companies that were later privatized, The Times found, she helped her relatives parlay their minority stakes into a billion-dollar portfolio of insurance, technology and real estate ventures. [Ibid]

“The couple’s only son sold a technology company he started to the family of Hong Kong’s richest man, Li Ka-shing, for $10 million, and used another investment vehicle to establish New Horizon Capital, now one of China’s biggest private equity firms, with partners like the government of Singapore, according to records and interviews with bankers. The prime minister’s younger brother, Wen Jiahong, controls $200 million in assets, including wastewater treatment plants and recycling businesses, the records show. [Ibid]

“As prime minister, Mr. Wen has staked out a position as a populist and a reformer, someone whom the state-run media has nicknamed “the People’s Premier” and “Grandpa Wen” because of his frequent outings to meet ordinary people, especially in moments of crisis like natural disasters. While it is unclear how much the prime minister knows about his family’s wealth, State Department documents released by the WikiLeaks organization in 2010 included a cable that suggested Mr. Wen was aware of his relatives’ business dealings and unhappy about them. “Wen is disgusted with his family’s activities, but is either unable or unwilling to curtail them,” a Chinese-born executive working at an American company in Shanghai told American diplomats, according to the 2007 cable. [Ibid]

“Eighty percent of the $2.7 billion in assets identified in The Times’s investigation and verified by the outside auditors were held by, among others, the prime minister’s mother, his younger brother, two brothers-in-law, a sister-in-law, daughter-in-law and the parents of his son’s wife, none of whom is subject to party disclosure rules. The total value of the relatives’ stake in Ping An is based on calculations by The Times that were confirmed by the auditors. The total includes shares held by the relatives that were sold between 2004 and 2006, and the value of the remaining shares in late 2007, the last time the holdings were publicly disclosed. [Ibid]

“Legal experts said that determining the precise value of holdings in China could be difficult because there might be undisclosed side agreements about the true beneficiaries. “Complex corporate structures are not necessarily insidious,” said Curtis J. Milhaupt, a Columbia University Law School professor who has studied China’s corporate group structures. “But in a system like China’s, where corporate ownership and political power are closely intertwined, shell companies magnify questions about who owns what and where the money came from.”

“Among the investors in the Wen family ventures are longtime business associates, former colleagues and college classmates, including Yu Jianming, who attended Northwestern with Winston Wen, and Zhang Yuhong, a longtime colleague of Wen Jiahong, the prime minister’s younger brother.

Wen Jiabao’s Wife: China’s “Diamond Queen?

20111029-China.org wen jiabaofamily.jpg
Wen with his family
David Barboza wrote in the New York Times: “It is no secret in China’s elite circles that the prime minister’s wife, Zhang Beili, is rich, and that she has helped control the nation’s jewelry and gem trade. But her lucrative diamond businesses became an off-the-charts success only as her husband moved into the country’s top leadership ranks, the review of corporate and regulatory records by The Times found. [Source: David Barboza, New York Times, October 25, 2012]

“A geologist with an expertise in gemstones, Ms. Zhang is largely unknown among ordinary Chinese. She rarely travels with the prime minister or appears with him, and there are few official photographs of the couple together. And while people who have worked with her say she has a taste for jade and fine diamonds, they say she usually dresses modestly, does not exude glamour and prefers to wield influence behind the scenes, much like the relatives of other senior leaders. [Ibid]

“The State Department documents released by WikiLeaks included a suggestion that Mr. Wen had once considered divorcing Ms. Zhang because she had exploited their relationship in her diamond trades. Taiwanese television reported in 2007 that Ms. Zhang had bought a pair of jade earrings worth about $275,000 at a Beijing trade show, though the source—a Taiwanese trader—later backed off the claim and Chinese government censors moved swiftly to block coverage of the subject in China, according to news reports at the time. “Her business activities are known to everyone in the leadership,” said one banker who worked with relatives of Wen Jiabao. The banker said it was not unusual for her office to call upon businesspeople. “And if you get that call, how can you say no?”

“Zhang Beili first gained influence in the 1990s, while working as a regulator at the Ministry of Geology. At the time, China’s jewelry market was still in its infancy. While her husband was serving in China’s main leadership compound, known as Zhongnanhai, Ms. Zhang was setting industry standards in the jewelry and gem trade. She helped create the National Gemstone Testing Center in Beijing, and the Shanghai Diamond Exchange, two of the industry’s most powerful institutions. [Ibid]

“In a country where the state has long dominated the marketplace, jewelry regulators often decided which companies could set up diamond-processing factories, and which would gain entry to the retail jewelry market. State regulators even formulated rules that required diamond sellers to buy certificates of authenticity for any diamond sold in China, from the government-run testing center in Beijing, which Ms. Zhang managed. As a result, when executives from Cartier or De Beers visited China with hopes of selling diamonds and jewelry here, they often went to visit Ms. Zhang, who became known as China’s “diamond queen.” ‘she’s the most important person there,” said Gaetano Cavalieri, president of the World Jewelry Confederation in Switzerland. ‘she was bridging relations between partners—Chinese and foreign partners.”

Diamond Deals of Wen Jiabao’s Wife

David Barboza wrote in the New York Times: “As early as 1992, people who worked with Ms. Zhang said, she had begun to blur the line between government official and businesswoman. As head of the state-owned China Mineral and Gem Corporation, she began investing the state company’s money in start-ups. And by the time her husband was named vice premier, in 1998, she was busy setting up business ventures with friends and relatives. [Source: David Barboza, New York Times, October 25, 2012]

“The state company she ran invested in a group of affiliated diamond companies, according to public records. Many of them were run by Ms. Zhang’s relatives—or colleagues who had worked with her at the National Gemstone Testing Center. In 1993, for instance, the state company Ms. Zhang ran helped found Beijing Diamond, a big jewelry retailer. A year later, one of her younger brothers, Zhang Jianming, and two of her government colleagues personally acquired 80 percent of the company, according to shareholder registers. Beijing Diamond invested in Shenzhen Diamond, which was controlled by her brother-in-law, Wen Jiahong, the prime minister’s younger brother. [Ibid]

“Among the successful undertakings was Sino-Diamond, a venture financed by the state-owned China Mineral and Gem Corporation, which she headed. The company had business ties with a state-owned company managed by another brother, Zhang Jiankun, who worked as an official in Jiaxing, Ms. Zhang’s hometown, in Zhejiang Province. In the summer of 1999, after securing agreements to import diamonds from Russia and South Africa, Sino-Diamond went public, raising $50 million on the Shanghai Stock Exchange. The offering netted Ms. Zhang’s family about $8 million, according to corporate filings. Although she was never listed as a shareholder, former colleagues and business partners say Ms. Zhang’s early diamond partnerships were the nucleus of a larger portfolio of companies she would later help her family and colleagues gain a stake in. [Ibid]

“The Times found no indication that Wen Jiabao used his political clout to influence the diamond companies his relatives invested in. But former business partners said that the family’s success in diamonds, and beyond, was often bolstered with financial backing from wealthy businessmen who sought to curry favor with the prime minister’s family. [Ibid]

“After Wen became prime minister, his wife sold off some of her diamond investments and moved into new things,” said a Chinese executive who did business with the family. He asked not to be named because of fear of government retaliation. Corporate records show that beginning in the late 1990s, a series of rich businessmen took turns buying up large stakes in the diamond companies, often from relatives of Mr. Wen, and then helped them reinvest in other lucrative ventures, like real estate and finance. According to corporate records and interviews, the businessmen often supplied accountants and office space to investment partnerships partly controlled by the relatives. “When they formed companies,” said one businessman who set up a company with members of the Wen family, “Ms. Zhang stayed in the background. That’s how it worked.”

Wen Jiabao’s Rich Only Son

David Barboza wrote in the New York Times: “Late one evening early this year, the prime minister’s only son, Wen Yunsong, was in the cigar lounge at Xiu, an upscale bar and lounge at the Park Hyatt in Beijing. He was having cocktails as Beijing’s nouveau riche gathered around, clutching designer bags and wearing expensive business suits, according to two guests who were present. [Source: David Barboza, New York Times, October 25, 2012]

“In China, the children of senior leaders are widely believed to be in a class of their own. Known as “princelings,” they often hold Ivy League degrees, get V.I.P. treatment, and are even offered preferred pricing on shares in hot stock offerings. They are also known as people who can get things done in China’s heavily regulated marketplace, where the state controls access. And in recent years, few princelings have been as bold as the younger Mr. Wen, who goes by the English name Winston and is about 40 years old. [Ibid]

“A Times review of Winston Wen’s investments, and interviews with people who have known him for years, show that his deal-making has been extensive and lucrative, even by the standards of his princeling peers. State-run giants like China Mobile have formed start-ups with him. In recent years, Winston Wen has been in talks with Hollywood studios about a financing deal. Concerned that China does not have an elite boarding school for Chinese students, he recently hired the headmasters of Choate and Hotchkiss in Connecticut to oversee the creation of a $150 million private school now being built in the Beijing suburbs. [Ibid]

“Winston Wen and his wife, moreover, have stakes in the technology industry and an electric company, as well as an indirect stake in Union Mobile Pay, the government-backed online payment platform—all while living in the prime minister’s residence, in central Beijing, according to corporate records and people familiar with the family’s investments. “He’s not shy about using his influence to get things done,” said one venture capitalist who regularly meets with Winston Wen. [Ibid]

“The younger Mr. Wen declined to comment. But in a telephone interview, his wife, Yang Xiaomeng, said her husband had been unfairly criticized for his business dealings. “Everything that has been written about him has been wrong,” she said. “He’s really not doing that much business anymore.”

“Winston Wen was educated in Beijing and then earned an engineering degree from the Beijing Institute of Technology. He went abroad and earned a master’s degree in engineering materials from the University of Windsor, in Canada, and an M.B.A. from the Kellogg School of Business at Northwestern University in Evanston, Ill., just outside Chicago. When he returned to China in 2000, he helped set up three successful technology companies in five years, according to people familiar with those deals. Two of them were sold to Hong Kong businessmen, one to the family of Li Ka-shing, one of the wealthiest men in Asia. [Ibid]

Wen Jiabao’s Rich Only Son and Hong Kong Tycoons

David Barboza wrote in the New York Times: “Late one evening early this year, the prime minister’s only son, Wen Yunsong, was in the cigar lounge at Xiu, an upscale bar and lounge at the Park Hyatt in Beijing. He was having cocktails as Beijing’s nouveau riche gathered around, clutching designer bags and wearing expensive business suits, according to two guests who were present. [Source: David Barboza, New York Times, October 25, 2012]

“Winston Wen’s earliest venture, an Internet data services provider called Unihub Global, was founded in 2000 with $2 million in start-up capital, according to Hong Kong and Beijing corporate filings. Financing came from a tight-knit group of relatives and his mother’s former colleagues from government and the diamond trade, as well as an associate of Cheng Yu-tung, patriarch of Hong Kong’s second-wealthiest family. The firm’s earliest customers were state-owned brokerage houses and Ping An, in which the Wen family has held a large financial stake. [Ibid]

“He made an even bolder move in 2005, by pushing into private equity when he formed New Horizon Capital with a group of Chinese-born classmates from Northwestern. The firm quickly raised $100 million from investors, including SBI Holdings, a division of the Japanese group SoftBank, and Temasek, the Singapore government investment fund. Under Mr. Wen, New Horizon established itself as a leading private equity firm, investing in biotech, solar, wind and construction equipment makers. Since it began operations, the firm has returned about $430 million to investors, a fourfold profit, according to SBI Holdings. “Their first fund was dynamite,” said Kathleen Ng, editor of Asia Private Equity Review, an industry publication in Hong Kong. “And that allowed them to raise a lot more money.” Today, New Horizon has more than $2.5 billion under it management. [Ibid]

Wen Jiabao’s Family and Chinese and Hong Kong Billionaires

David Barboza wrote in the New York Times: “In the late 1990s, Duan Weihong was managing an office building and several other properties in Tianjin, the prime minister’s hometown in northern China, through her property company, Taihong. She was in her 20s and had studied at the Nanjing University of Science and Technology. [Source: David Barboza, New York Times, October 25, 2012]

“Around 2002, Ms. Duan went into business with several relatives of Wen Jiabao, transforming her property company into an investment vehicle of the same name. The company helped make Ms. Duan very wealthy. It is not known whether Ms. Duan, now 43, is related to the prime minister. In a series of interviews, she first said she did not know any members of the Wen family, but later described herself as a friend of the family and particularly close to Zhang Beili, the prime minister’s wife. As happened to a handful of other Chinese entrepreneurs, Ms. Duan’s fortunes soared as she teamed up with the relatives and their network of friends and colleagues, though she described her relationship with them involving the shares in Ping An as existing on paper only and having no financial component. [Ibid]

“Ms. Duan and other wealthy businesspeople—among them, six billionaires from across China—have been instrumental in getting multimillion-dollar ventures off the ground and, at crucial times, helping members of the Wen family set up investment vehicles to profit from them, according to investment bankers who have worked with all parties. [Ibid]

“Established in Tianjin, Taihong had spectacular returns. In 2002, the company paid about $65 million to acquire a 3 percent stake in Ping An before its initial public offering, according to corporate records and Ms. Duan’s graduate school thesis. Five years later, those shares were worth $3.7 billion. The company’s Hong Kong affiliate, Great Ocean, also run by Ms. Duan, later formed a joint venture with the Beijing government and acquired a huge tract of land adjacent to Capital International Airport. Today, the site is home to a sprawling cargo and logistics center. Last year, Great Ocean sold its 53 percent stake in the project to a Singapore company for nearly $400 million. [Ibid]

“That deal and several other investments, in luxury hotels, Beijing villa developments and the Hong Kong-listed BBMG, one of China’s largest building materials companies, have been instrumental to Ms. Duan’s accumulation of riches, according to The Times’s review of corporate records. The review also showed that over the past decade there have been nearly three dozen individual shareholders of Taihong, many of whom are either relatives of Wen Jiabao or former colleagues of his wife. Ms. Duan strongly denied having financial ties to the prime minister or his relatives and said she was only trying to avoid publicity by listing others as owning Ping An shares. “The money I invested in Ping An was completely my own,” said Ms. Duan, who has served as a member of the Ping An board of supervisors. “Everything I did was legal.” [Ibid]

“Another wealthy partner of the Wen relatives has been Cheng Yu-tung, who controls the Hong Kong conglomerate New World Development and is one of the richest men in Asia, worth about $15 billion, according to Forbes. In the 1990s, New World was seeking a foothold in mainland China for a sister company that specializes in high-end retail jewelry. The retail chain, Chow Tai Fook, opened its first store in China in 1998. Mr. Cheng and his associates invested in a diamond venture backed by the relatives of Mr. Wen and co-invested with them in an array of corporate entities, including Sino-Life, National Trust and Ping An, according to records and interviews with some of those involved. Those investments by Mr. Cheng are now worth at least $5 billion, according to the corporate filings. Chow Tai Fook, the jewelry chain, has also flourished. Today, China accounts for 60 percent of the chain’s $4.2 billion in annual revenue. [Ibid]

Fallout of the Hidden Riches on Wen Jiabao for Premier

David Barboza wrote in the New York Times: “In the winter of 2007, just before he began his second term as prime minister, Wen Jiabao called for new measures to fight corruption, particularly among high-ranking officials. “Leaders at all levels of government should take the lead in the antigraft drive,” he told a gathering of high-level party members in Beijing. “They should strictly ensure that their family members, friends and close subordinates do not abuse government influence.” The speech was consistent with the prime minister’s earlier drive to toughen disclosure rules for public servants, and to require senior officials to reveal their family assets.[Source: David Barboza, New York Times, October 25, 2012]

“Revelations about the Wen family’s wealth could weaken him politically. “This will affect whatever residual power Wen has,” said Minxin Pei, an expert on Chinese leadership and a professor of government at Claremont McKenna College in California. The prime minister’s supporters say he has not personally benefited from his extended family’s business dealings, and may not even be knowledgeable about the extent of them. [Ibid]

“In March 2012, the prime minister hinted that he was at least aware of the persistent rumors about his relatives. During a nationally televised news conference in Beijing, he insisted that he had “never pursued personal gain” in public office. “I have the courage to face the people and to face history,” he said in an emotional session. “There are people who will appreciate what I have done, but there are also people who will criticize me. Ultimately, history will have the final say.”

Lawyers for Wen Jiabao's Family Deny 'Hidden Riches' Report

A few days after the New York Times story was published The Guardian reported: “Lawyers for Chinese premier Wen Jiabao's family have denied reports of their "hidden riches" saying they are untrue, according to Hong Kong media. The Chinese foreign ministry said the story "blackens China's name and has ulterior motives". Authorities also blocked the media organisation's Chinese language and main websites and banned microblog searches for its name and a wide variety of terms related to the article. [Source: Tania Branigan, The Guardian, October 28, 2012]

It is unusual for the family of a senior leader to comment publicly on foreign media reports about them. The statement said: "The so-called 'hidden riches' of Wen Jiabao's family members in the New York Times' report does not exist. "Some of Wen Jiabao's family members have not engaged in business activities. Some were engaged in business activities, but they did not carry out any illegal business activity. They do not hold shares of any companies." It said that Wen's mother had never had any income or property beyond her salary and pension. The statement added: "Wen Jiabao has never played any role in the business activities of his family members, still less has he allowed his family members' business activities to have any influence on his formulation and execution of policies." [Ibid]

Eileen Murphy, a spokeswoman for the New York Times, wrote in an email published by the media organisation itself: "We are standing by our story, which we are incredibly proud of and which is an example of the quality investigative journalism The Times is known for."

Barbosa's Wins Pulitzer Prize While Beijing Look's Into Wen Jiabao Family Wealth

David Barboza, the Shanghai Bureau Chief of The New York Times, won the 2013 Pulitzer Prize for international reporting for exposing the wealth amassed by the extended family of former premier Wen Jiabao. The report led the Chinese government to block Web access to both the English and Chinese versions of the New York Times entirely. [Source: Minami Funakoshi, The Atlantic, April 17, 2013 <<<<]

About a week and a half after the New York Times story was published Reuters reported: “China's ruling Communist Party has launched an internal inquiry into allegations made by the New York Times that the family of premier Wen Jiabao accumulated at least $2.7 billion in "hidden riches", the South China Morning Post said. Wen himself asked for the inquiry in a letter to the Politburo Standing Committee “the party's top decision-making body of which he is also a member” in an apparent move to clear his name, the Hong Kong daily said, citing unnamed sources. [Source: Reuters, November 5, 2012]

"The Standing Committee had agreed to his (Wen's) request," the South China Morning Post said, quoting the sources. It cited some analysts as saying that Wen's request for a probe showed the premier was keen to use it as a chance to push forward a long-stalled "sunshine law", which would require a public declaration of family assets by senior leaders. However, professor He Weifang, a law expert at Peking University, told the Post that he doubted the party's senior leadership would go that far. "Even if Wen wants to disclose his assets, I don't think other senior leaders, who may also have 'hidden wealth' of their own, will allow him to go ahead, considering the explosive social repercussions," He said

Reaction in China to Barbosa's Pulitzer Prize

On Sina Weibo, China's Twitter, a popular user with the handle "Pretending to be in New York" posted the following comment the day the Pulitzer Prizes were announced: “The Pulitzer Prize for reporting just released: the New York Times claims four awards, one of which was awarded for that well-known China-related report. That piece won the prize for international reporting.” Although the user was careful to avoid mentioning Wen Jiabao's hidden family assets, Chinese censors apparently found it unacceptable nonetheless. Within 24 hours, the tweet was swept clean off of Weibo. [Source: Minami Funakoshi, The Atlantic, April 17, 2013 <<<<]

Tea Leaf Nation collected some of the comments the thread gathered before its deletion. Though few, and perhaps not fully representative, they provide a brief insight into Chinese online reaction to this topic. Some Web users saw the incident as an American conspiracy to undermine Chinese leadership through news reporting. "China is resolutely opposed to any country, any person, using the Pulitzer journalism prize to interfere with China's internal affairs and defile its former leaders," commented one poster. "This is definitely an American imperialist [conspiracy]," wrote another. <<<<

Some, on the other hand, congratulated David Barboza and the New York Times. User @?Ianni wrote, "That famous NYT article received special mention -- congratulations! A Pulitzer Prize in international reporting! What a courageous journalist." @ Salt_Lee wrote,"Congratulations on that famous report!" Others responded in genuine — or perhaps feigned — confusion, pointing out how common such scandals are in China. "Which report [did the NYT receive the award for]? The one about amassed wealth? Or the one about swimming pigs?" asked one user, referring to the recent flood of dead pigs in Shanghai's Huangpu River. "I would like the source for that report. It's the one related to high-level government corruption, I'm assuming?" wrote another. For Chinese netizens, censorship is a fact of life. Over the years, they have found ways to circumvent the regulations, such as inventing codes to discuss sensitive topics. In order to gain access to David Barboza's censored report, some users requested links or screenshots. Besides demonstrating netizen ingenuity, this also suggests that there are many Chinese citizens who may have heard about, but have never actually read, the report in question. <<<<

"They censored the article before I had the time to read it. I remember thinking at that time that the reason I couldn't access it is because the snowstorm in New York interfered with their internet," wrote one user. “Even if you give us the link, we probably can't open it. Please post an image of the report so that we can all see it," requested another. Many web users prophesied the expurgation of the tweet posted by "Pretending to be in New York" as well -- yet another sign of increased netizen familiarity with the un-written codes of online censorship. "'Pulitzer Prize' will become a sensitive term," forecasted one user. “Ireckon the Chinese government will announce tomorrow that the 'Pulitzer Price has no public credibility.' But they can't force other people's mouths shut, and we can't cover our own eyes. Our government is truly foolish," another. However, despite such predictions, the news itself is not completely off-limits on the Web. "Pulitzer Prize for reporting" is one of the trending topics on Weibo, and some posts that explicitly mention David Barboza's name remain untouched. Most such posts, however, do not touch upon the actual content of Barboza's report. <<<<

Still, there are some daring posts that, surprisingly, are uncensored on Weibo. One user wrote: "The NYT journalist David Barboza wins this year's Pulitzer Prize for international reporting for his report on the $2.7 billion fortune of 'the clan high up in the starry heavens.'" The "clan high up in the starry heavens" is a code for the extended family of Wen Jiabao. Another user, also skirted the censors by tweeting the news in English: “Awarded to David Barboza for his striking exposure of corruption at high levels of the Chinese government, including billions in secret wealth owned by relatives of the prime minister, well documented work published in the face of heavy pressure from the Chinese officials.” Why are these posts not censored, while the post by "Pretending to be in New York" is? Perhaps the user "Pretending to be in New York" was censored because of his status as a widely followed, vocal social critic on Weibo. Perhaps the other posts escaped deletion through their ingenuity, or sheer good luck. And, perhaps, it is just a matter of time until the censors hone back in. <<<<

Wen Jiabao’s Daughter’s Charity Gives £3.7 Million to Cambridge University

Wen Ruchun, the only daughter of Wen Jiabao runs a charity that gave Cambridge University a £3.7 million donation. Tom Phillips wrote in The Telegraph, “In early 2012, when speculation about links between the mysterious Chong Hua Foundation and the Chinese government first emerged, Cambridge University insisted it knew of no connection between the two. The revelation that Chong Hua is controlled by Wen Ruchun – a fully-fledged member of China's "red nobility" – suggests Cambridge should urgently review those findings. For Ms Wen enjoys extremely close ties to the highest echelons of the Communist Party – she is the only daughter of Wen Jiabao. [Source: Tom Phillips, The Telegraph, June 11, 2014 +\+]

“Details of Wen Ruchun's personal life are few and far between, as is the case with most members of the red aristocracy, the small and privileged Communist elite that controls China's politics and much of its economy. She studied at the People's Liberation Army's University of International Relations in Nanjing and went to the United States in the mid-1990s, according to a 2012 report in a Hong Kong magazine that could not immediately be verified. Ms Wen, who also uses the name Lily Chang, graduated from the University of Delaware in 1998, and went on to live in Trump Place, a luxury property overlooking the Hudson River, the New York Times reported in 2013. +\+

“Like many US-educated princelings, she rose fast in Wall Street. Ms Wen worked at Lehman Brothers and later what was then Credit Suisse First Boston, according to the New York Times. Between 2006 and 2008, she reportedly earned £1.1 million in consultant fees from JP Morgan. Family members refer to her as "Xiao Meng" or the Little Sprout, according to reports in the Hong Kong press. Ms Wen also has links to the UK. She is thought to have lived in Cambridge for a period when Liu Chunhang, her husband, was studying for his PhD there. +\+

“Mr Liu has been head of the statistics and research departments at China's banking regulator since 2006, according to online biographies. Meanwhile, Ms Wen holds a high-powered job at the Beijing-based State Administration for Foreign Exchange (SAFE) where she is understood to have worked for more than a decade. Founded in 1979 by the Communist Party's powerful State Council, SAFE is tasked with investing almost $4 trillion of Chinese foreign exchange reserves. +\+

“In the wake of the initial controversy over Chong Hua's potential connections to China's Communist rulers , Tim Holt, Cambridge's head of communications, told The Telegraph the donation had "been scrutinised formally by the executive committee of our university council, in line with our published ethical guidelines for the acceptance of donations". "Our investigation did not identify any link between this private foundation and the Chinese government," he added.

Image Sources: Chinese government (China .org) , Xinhua, Wikipedia, White House

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

Last updated June 2015

This site contains copyrighted material the use of which has not always been authorized by the copyright owner. Such material is made available in an effort to advance understanding of country or topic discussed in the article. This constitutes 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. If you are the copyright owner and would like this content removed from factsanddetails.com, please contact me.