Skip to main content

China's princelings storing riches in Caribbean offshore haven

More than a dozen family members of China's top political and military leaders are making use of offshore companies based in the British Virgin Islands, leaked financial documents reveal.
The brother-in-law of China's current president, Xi Jinping, as well as the son and son-in-law of former premier Wen Jiabao are among the political relations making use of the offshore havens, financial records show.
The Hong Kong office of Credit Suisse, for example, established the BVI company Trend Gold Consultants for Wen Yunsong, the son of Wen Jiabao, during his father's premiership — while PwC and UBS performed similar services for hundreds of other wealthy Chinese individuals.

The disclosure of China's use of secretive financial structures is the latest revelation from "Offshore Secrets", a two-year reporting effort led by the International Consortium of Investigative Journalists (ICIJ), which obtained more than 200 gigabytes of leaked financial data from two companies in the British Virgin Islands, and shared the information with the Guardian and other international news outlets.

So far none of the political figures have been directly implicated in the arrangements. The investigation found a total of 21,000 accounts from Hong Kong and mainland China. It is clear that China is following the west on the path to income inequality.

The British Virgin Island have regularly been in the news as an off shore tax haven. The Chinese are just getting hip to the financial schemes that are being used by large US companies like Google to park huge piles of financial assets in low tax jurisdictions.

EMAIL TO A FRIEND X
Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags

?

More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

  •  It is ironic that the formerly "Communist" (6+ / 0-)

    People's Republic of China is now seeing the worst face of capitalism - money running away from responsibility.  Money will run out the country in search of lesser taxes and greener fields.  The Chinese people will be left with a recked environment and dreams of gold.

    An illusion can never be destroyed directly... SK.

    by Thomas Twinnings on Tue Jan 21, 2014 at 02:11:16 PM PST

    •  They ceased to be a communist economy (6+ / 0-)

      a long time ago. Probably the most accurate description of their present arrangements would be state capitalism.

      •  I think communist no longer refers to economic (0+ / 0-)

        ideology but rather a Leninist method of maintaining power.

        A well versed cadre would probably argue that the economy is still directed by the state for the good of the people or some such, I heard an English speaking editor of one of China's ultra nationalist newspapers saying something along those lines the other day. The state and it's banking are so interwoven with very large businesses that it's hard to say where one ends and the other begins. Also large state institutions have big companies with no relations to their original purpose. Like the army running hydro generating companies or telecom.

        In the government bookstore in Laos (and until very recently they were the only ones who printed anything in the Lao language) you can buy pictures of Lenin but none of Marx.

        Kleptocracy or capitalist one thing defines the remaining Communist dictatorships of Asia, (China, Vietnam, North Korea, Laos) if you seriously work against their interests they're going to beat the crap out of you and maybe kill you. Modern Communism.

        “Conservation… is a positive exercise of skill and insight, not merely a negative exercise of abstinence and caution…” Aldo Leopold

        by ban nock on Wed Jan 22, 2014 at 04:51:35 AM PST

        [ Parent ]

  •  The worst part (4+ / 0-)

    is that, as far as I can tell, the folks who live there get a minimum of benefits. It it seems to be a Randian heaven: whole islets owned by people like Richard Branson, run down towns with run down banks 'holding' billions of dollars, a few shoddily built office buildings with a few billion more, rich wankers on big yachts, wannabe wankers on rent-a-yachts, cruise ships the size of Dallas, and a lot of dying coral. Sorry, it's supposed to be sailing heaven, but it just isn't as gemütlich as it's marketed. Maybe I would need to go other places in the Caribbean to judge how well the difference all that money is making to people there.

    "The 'Middle' is a crowded place - that is where the effective power is - the extreme right and left might annoy governments, but the middle terrifies them." Johnny Linehan

    by northsylvania on Tue Jan 21, 2014 at 02:25:06 PM PST

    •  It is an arrangement that is devised (3+ / 0-)
      Recommended by:
      mookins, Phoenix Woman, northsylvania

      and supported by the financial interest in the UK.

    •  So that's Europe's problem (0+ / 0-)

      Switzerland has a fairly comprehensive social safety net and excellent public services.  It also has a manufacturing base independent of banking.

      Luxembourg is "liberal Republican welfare state" writ large.

      Nobody in Lichtenstein or Monaco seem to be hurting.  (In Monaco's case, they just lease France's welfare state.  In Lichtenstein, everyone is either a lawyer or a banker or a plutocrat in exile.)

      They all have this tax haven thing completely wrong, I guess.  I mean, what kind of tax haven for modern plutocrats believes in consent of the people?

  •  The more interesting question (2+ / 0-)
    Recommended by:
    whenwego, kurt

    is where all that money came from -- likely sheer corruption/bribery/kickbacks and payoffs.

    It's a question we should probably be asking of our own members of Congress. Some came into public service with a stash of either family money or earned savings, but many seem to get ungodly rich while they're supposedly working full-time doing the people's business on what is not a lavish salary given the cost of maintaining two homes, one in expensive DC.

    •  I would imagine that it comes (3+ / 0-)
      Recommended by:
      mookins, whenwego, ban nock

      from different places. There have certainly been bribery and corruption scandals in China. There are also entrepreneurs who are getting rich on Global enterprises. Not much is happening there that hasn't been going on for a long time in the US and Europe.  

    •  rugbymom - business in China is very political (1+ / 0-)
      Recommended by:
      ban nock

      nearly everything in China is done in partnerships with the Chinese. Because everything is so political your China adviser suggests that if you retain a specific relative of an important member of the inner circle things will go smoothly. And they do. However, the important person has never met you, doesn't know you and never had a conversation with you. No said anyone had to be retained, it was just a suggestion, so it is very difficult to prove any criminal intent or knowledge.

      "let's talk about that"

      by VClib on Tue Jan 21, 2014 at 10:00:42 PM PST

      [ Parent ]

    •  More comes from Real Estate and Retailing (2+ / 0-)
      Recommended by:
      ban nock, Richard Lyon

      The most wealthy in China are not officials but generally real estate developers or Internet Merchants.

  •  as so many other kleptocrats from elsewhere (4+ / 0-)
    Recommended by:
    whenwego, Phoenix Woman, wu ming, koNko
    The British Virgin Island have regularly been in the news as an off shore tax haven. The Chinese are just getting hip to the financial schemes that are being used by large US companies like Google to park huge piles of financial assets in low tax jurisdictions

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013

    by annieli on Tue Jan 21, 2014 at 03:09:24 PM PST

  •  Communism "with Chinese characteristics" (1+ / 0-)
    Recommended by:
    ban nock
  •  China has higher income inequality than USA (2+ / 0-)
    Recommended by:
    ban nock, Richard Lyon

    Because the gaps are even greater and the middle class smaller.

    So now you know why Bitcoins have been banned and there are new rules forbidding government officials from putting their wives or more than 2 children overseas.

    But you don't have to go to the British Virgin Islands to find the cash of China's wealthy, you can go to London or New York or wherever.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site