
Hidden Fortunes of Chinese Leaders - tomkit
http://www.nytimes.com/2012/10/26/business/global/family-of-wen-jiabao-holds-a-hidden-fortune-in-china.html?_r=0&pagewanted=all
======
acslater00
Well I don't know about the rest of you, but I'm surprised that in a
centrally-managed, state-controlled, corporatist economic system, the family
of the most powerful individual in the nation would have managed to amass
great personal wealth. That just runs counter to all of my instincts, and if
these stories are true, it would really be the first time this sort of thing
happened throughout history.

I'm shocked, really. I would have thought the People's Republic of China is
above this sort of thing.

~~~
kamaal
Why are you surprised? communist/socialists/welfare state nations have always
tended more towards dynasty type dictatorships. Eg: North Korea, Gulf
Countries etc.

Freebies, pocket change welfare schemes launched by the government is
basically a token bribe given to the public to just shut up, while the leaders
are busy in their corrupt practices.

~~~
TeMPOraL
Poe's law. [0]

I'm pretty sure he was being ironic.

[0] - <http://en.wikipedia.org/wiki/Poes_law>

~~~
sageikosa
My contextual parser detected sarcasm, not irony.

~~~
kybernetikos
Our word irony comes originally from the greek word 'eironeia', which was
typically used of someone pretending to be naive or ignorant (e.g. Socrates).

More recently, it's split into a number of different meanings, including
dramatic and situational, but it is commonly used in modern times to refer to
a situation where the speaker means something other than what they say by
their utterance.

In both this more recent meaning, and in the older greek sense of 'feigning of
ignorance', the comment by acslater00 was ironic.

~~~
swombat
<http://dictionary.reference.com/browse/irony?s=t> is informative:

> Irony, sarcasm, satire indicate mockery of something or someone. The
> essential feature of irony is the indirect presentation of a contradiction
> between an action or expression and the context in which it occurs. In the
> figure of speech, emphasis is placed on the opposition between the literal
> and intended meaning of a statement; one thing is said and its opposite
> implied, as in the comment, “Beautiful weather, isn't it?” made when it is
> raining or nasty. Ironic literature exploits, in addition to the rhetorical
> figure, such devices as character development, situation, and plot to stress
> the paradoxical nature of reality or the contrast between an ideal and
> actual condition, set of circumstances, etc., frequently in such a way as to
> stress the absurdity present in the contradiction between substance and
> form.

> _Irony differs from sarcasm in greater subtlety and wit. In sarcasm ridicule
> or mockery is used harshly, often crudely and contemptuously, for
> destructive purposes._

> It may be used in an indirect manner, and have the form of irony, as in
> “What a fine musician you turned out to be!” or it may be used in the form
> of a direct statement, “You couldn't play one piece correctly if you had two
> assistants.” The distinctive quality of sarcasm is present in the spoken
> word and manifested chiefly by vocal inflection, whereas satire and irony,
> arising originally as literary and rhetorical forms, are exhibited in the
> organization or structuring of either language or literary material. Satire
> usually implies the use of irony or sarcasm for censorious or critical
> purposes and is often directed at public figures or institutions,
> conventional behavior, political situations, etc.

------
pg
Elizabethan courtiers hid many of their assets behind nominees. If Chinese
leaders are also using nominees who aren't family members (I don't see why
they wouldn't), the fortunes they control could be a lot bigger than the NYT
can discover.

~~~
jagira
Indian leaders are known to hide their illegitimate wealth and other assets
behind nominees or shell companies.

Recently, anti-corruption crusaders and media have unearthed some massive
hidden fortunes.

[http://www.globalpost.com/dispatches/globalpost-
blogs/india/...](http://www.globalpost.com/dispatches/globalpost-
blogs/india/india-corruption-bipartisan-gadkari)

~~~
kamaal
What the anti corruption crusaders are likely to unearth might be a very tiny
fraction of tiny fractions of illegitimate wealth. They can do nothing as
activists themselves. The financial and other powers these people are too
powerful to bring them down. The only other way is to go the political route
which Arvind Kejriwal is doing now, but we already know to do anything big in
politics you will likely not be able to do it, unless you are corrupt yourself
and allow donations from other shady sources.

------
viviantan
It's rare to see successive and extensive news coverage of corruption among
major Chinese Communist Party leaders, and there's been 3 this year already:
Bo Xilai in March, Xi Jinping in June, and now Wen Jiabao.

This year's unusual because 7 major members of the Politburo Standing
Committee are stepping down and their replacements will be selected at the
18th National Congress of the Communist Party of China. This is the reason the
dueling political factions are aggressively ousting eachother, or else stories
about corruption would never have made it to major media outlets.

The Congress was originally scheduled to commence November 4th (or sometime
just before the US presidential elections) but was suddenly changed to
November 8th. I don't think there's been official commentary on the last
minute date change, but it's pretty obvious the Chinese party leaders want to
know who's going to be the next US president first so they could "adjust" the
makeup of of the Chinese political body accordingly.

I'm impressed by Bloomberg's and NYT's coverage. There's so much stuff that
gets suppressed, even when tidbits of stories go viral on Weibo, the entire
story almost never makes it over to this side of the Atlantic in one piece.

~~~
viviantan
By Atlantic I meant Pacific, because I'm obviously a geography genius :)

------
apaprocki
Related, from a little while ago, "Xi Jinping Millionaire Relations Reveal
Fortunes of Elite": [http://www.bloomberg.com/news/2012-06-29/xi-jinping-
milliona...](http://www.bloomberg.com/news/2012-06-29/xi-jinping-millionaire-
relations-reveal-fortunes-of-elite.html)

For that article, our sites were blocked in China. I'm curious whether NYT
will get the block as well.

~~~
rudyfink
According to the NY Times, the parent article is now blocked in China (
[https://www.nytimes.com/2012/10/26/world/asia/china-
blocks-w...](https://www.nytimes.com/2012/10/26/world/asia/china-blocks-web-
access-to-new-york-times.html) ).

~~~
newhouseb
I've always been amazed (until now) that the NYT hasn't been blocked (when
YouTube, Wikipedia, Twitter, Facebook and a bunch of other news organizations
are). I can only guess because it's primarily an english publication. During
the 2008 Olympics (when I was in China), I was consistently amused that I
could read about all the atrocities committed in the name of the Olympics in
the NYT from behind the Great Firewall of China.

~~~
sgw928
NYT has actually got blocked and unblocked back and forth several times. A
funny case was that in an interview a reporter asked former president Jiang
Zeming why NYT was blocked and Jiang said he would personally look into what
was going on. Soon after that, it got unblocked.

------
comicjk
The common Chinese understanding of government is cyclical: each dynasty
dispels the abuses of the past when it arrives, then becomes corrupt and is
itself overthrown. The current regime is trying to base its legitimacy on
"results" - ie growth - not clean government. It is also using nationalism to
divert popular attention. This may work. If it doesn't, however, Chinese
tradition makes it unlikely that the party leaders will be forgiven. A
bloodless transition to democracy is sadly the least likely outcome.

~~~
byw
If I'm not mistaken you're referring to this:

<http://en.wikipedia.org/wiki/Mandate_of_Heaven>

------
gojomo
I have a theory.

Giant productive societies will be ruled by billionaires. If the society tries
to choose otherwise -- whoever else they choose as leaders will become
billionaires.

I'm not sure the theory is true, but we may want to prepare mechanisms that
still work for checking leaders' power, and attaining an acceptable level of
competent and just governance, if it does turn out to be true. I suspect that
will require more transparency than China practices.

~~~
arrrg
Angela Merkel isn't exactly rich (certainly no billionaire) and neither are
many other European leaders. Even US presidents don't necessarily turn into
billionaires.

~~~
gojomo
I included enough qualifiers to prevent such simple falsification-by-trivial-
example! Perhaps Germany isn't 'giant' enough. (It only has 80M people
compared to China 1.3B, India 1.2B, USA 300M, Russia 141M.)

Or maybe its real behind-the-scenes rulers are still billionaires (despite the
particular figurehead officeholders). Or maybe the time required for the 'will
be'/'will become' prediction hasn't passed yet.

I realize this is a 'no-true-scotsman' dodge. It wasn't meant to be a rigorous
theory, just a thought-provoker. In 'giant productive societies' those
people/movements best at marshaling large numbers of workers/machinery/voters
will have both political power, and billionaire-like financial assets. The
same competencies can acquire both... and power and wealth can be converted
both ways (via both corrupt and non-corrupt processes).

------
jcampbell1
While the natural response is to be disgusted by the corruption, there is also
something else going on here. If startups are defined by growth, China is the
land where tons companies are winning startups. For every 1992 dollar of
income there are now 15 dollars to spread around.* An astonishing amount of
wealth has been created in the last 20 years, and it has spilled on many
people.

In the US, when tremendous amounts of value and wealth are created, it also
lands in odd places. Think of the early Google chef, or the Facebook artist
who are both extremely wealthy. They got the money because tons of value was
created and it just landed on them because they were in the right place at the
right time.

I am not really making a point other than saying that this is a story of
corruption which is terrible, and a story of value creation.

* In the same period, the US has gone from $1 to $2 in real income per capita

------
babesh
Animal farm. The pigs that led the revolution against the humans become the
humans.

~~~
damian2000
"All Animals Are Equal. But Some Animals Are More Equal Than Others."

~~~
Eliezer
All numbers are equal to six, but not all sixes are equal to each other.

------
waterlesscloud
I saw some foreign policy gurus on Twitter saying that the names of central
party leaders are permanently blocked on Weibo, so as to prevent online
discussion of them. Which is really interesting.

~~~
confluence
If I was the Chinese - I'd just give him a codename like the CIA does with
their assets.

Then just change it every so often.

~~~
justincormack
There is a lot of that eg see <http://en.m.wikipedia.org/wiki/Grass_Mud_Horse>

------
rumcajz
What are the alternatives? Transferring from state-owned economy to privately
owned one has to happen somehow. The experiment with straightforward
privatisation, as done in Eastern European countries after 1989 was a disaster
at least comparable to what's going on in China now.

~~~
ido
In some more than others. Worked pretty well in Czech Republic, Slovakia,
Slovenia & Poland.

~~~
TeMPOraL
> Worked pretty well in (...) Poland.

I don't know. Members of the generation of my mother and my grandmother tend
to blame privatization for all the downfall of Polish economy. There is
something to that if you look at how railoads are managed right now - it's a
stinking pile of corruption and theft, and the surprising thing is that it
works at all.

------
dsr12
Single page view of the article:
[http://www.nytimes.com/2012/10/26/business/global/family-
of-...](http://www.nytimes.com/2012/10/26/business/global/family-of-wen-
jiabao-holds-a-hidden-fortune-in-china.html?_r=0&pagewanted=all)

------
TechNewb
If only we could get this detailed reporting on Romney and Obama from the
Times. :)

------
seivan
Most of Governments are corrupt. It's not a inherently Asian thing.

What is an Asian thing is the fact that in most other countries, you can do
something about it.

Good luck with that in Asia.

~~~
babesh
Not true. Look at Russia, Brazil, Mexico, most of the Middle East, etc.... In
general, the only thing you can do about it is leave. Few exceptions are where
there are enough opportunities that it pays for everyone to benefit or where a
small group of people with no resources realize that they need to band
together to prosper: Singapore, scandanavian countries, Japan. Notice some of
these are in Asia too?

~~~
damian2000
Freedom of the press & internet has a lot to do with this. Indonesia's corrupt
president Suharto was toppled in the 1990s only when the press started going
after him. When you look at Russia and China, one thing they have in common is
restricted press/internet freedom - this keeps the status quo, no change.

~~~
richardjordan
I'm pretty sure that the history of Suharto's fall is wrapped up in fallings
out with various powerful US interests, including those with large holdings in
resource mining.

------
frannk
they have blocked NYT, making a confirmation in Chinese government way. In
china , smart people call Wen a "king of actors".He appears in "CCTV news"
everyday as a hard work leader , but we do not believe him .He is so like
acting, nearly forgeting he is an asshole. But mass chinses people think, he
is a good leader, who will never steal money using his power(because he is a
so good an actor). I dont know how can we do as a chinese civalian . I do not
believe the next government either.

------
confluence
I assume this with any kind of nexus between politics and business - doesn't
matter which country.

I've always found it funny that we pay those who control the budgets of
trillion dollar economies so little as compared to their private sector
counterparts. I mean - what would you pay the CEO of a trillion dollar
corporation?

Paying public servants so little makes it relatively easy to either buy their
favour or have their favor bestowed upon you with insignificant sums of money.
Give ~1% of yearly profits to campaign finance - get a $10 billion dollar
defense contract, or relaxed loans or a stronger monopoly.

It's just legalised bribery.

~~~
nikcub
The most frequently cited example is that Singapore pays its government
executives market wages, and they consistently rank in the top 5 least corrupt
nations[0]

But so do Australia and New Zealand, and the salaries here in the government
sector are much lower than they are in the private sector.

This is a well researched field[1]:

> In a bribery experiment, we test the hypothesis that distributive fairness
> considerations make relatively well-paid public officials less corruptible.
> Corrupt decisions impose damages to workers whose wage is varied in two
> treatments. However, there is no apparent difference in behavior.

There is no link between wages and corruption - there are many, many other
factors that make up corruption.

Punishment and likelihood of being caught also seems to not disuade
corruption. China has a large and very well funded public prosecutors office
that focuses solely on corruption cases, the onus of evidence is low, it is
the #1 domestic issue with much political pressure and the usual sentence on
conviction is death (frequently plea bargained down to life or less in return
for implicating others, but many corrupt officials have been executed).

[0]
[http://en.wikipedia.org/wiki/Corruption_Perceptions_Index#Ra...](http://en.wikipedia.org/wiki/Corruption_Perceptions_Index#Rankings)

[1] "Fair Salaries and the Moral Cost of Corruption" - [pdf]
<http://128.243.80.167/cedex/documents/papers/2002-05.pdf>

~~~
daniel-cussen
There is no link between wages and corruption - there are many, many other
factors that make up corruption.

Yes there is. If public servants are grossly underpaid, or vulnerable, they'll
turn to corruption for income or safety (think of a policeman looking the
other way in countries like Argentina). In Argentina, for instance, policemen
were very poorly paid after the 2001 crash, and at the same time, an
incredible wave of crime washed over the country, much like in Greece today.
Police started getting paid much less, for a much more dangerous job (the
murder rate for policeman rose dramatically). So they simply demanded bribes
(long list of ways how to do this) and stayed out of trouble when they could.
To compensate for the danger imposed by their job, they started looking the
other way more.

------
777466
Can someone put those numbers in context? Are they large or small compared to
what you'd expect/other elites?

------
blago
Unheard of. Ever seen a western politician (or their family) go bankrupt while
in office? This runs counter to odds, statistics, etc. The only difference is
the methods and the scale.

~~~
tlrobinson
Not that western politicians are squeaky clean, but there's a bit of a
difference between not going bankrupt and amassing billion dollar fortunes
while in office.

~~~
DougWebb
In the U.S., our politicians get rich(er) after they leave office. Same for
appointed government officials. Still a degree of corruption, but not as bad.

~~~
blago
A fun sample to the contrary:
<http://en.wikipedia.org/wiki/Governor_of_Illinois>

