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Exposed: offshore assets of China's political elite

Major

<p>President Xi Jinping (picture: Sydney Morning Herald/Reuters)</p>

President Xi Jinping (picture: Sydney Morning Herald/Reuters)

  • Philip Wen for Sydney Morning Herald
  • China
  • January 22, 2014
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Close family members of China’s political elite, including the brother-in-law of President Xi Jinping, have been exposed as operating companies in offshore tax havens, according to leaked financial documents obtained as part of a major international investigation.

The confidential documents, part of 2.5 million files obtained by the International Consortium of Investigative Journalists, reveal the use of secretive entities in the Cook Islands or British Virgin Islands by a cross-section of China’s most powerful political, military and business elite.

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 now embroiled in corruption scandals.

While the ownership of secret offshore accounts does not necessarily imply illegal conduct, the secretive nature of such offshore accounts make auditing difficult and has the potential to help shroud the true extent of the party elite's wealth, the consortium said.

The leaks are the latest in a set of embarrassing revelations for China’s ruling Communist Party, after investigative reports published by the New York Times and Bloomberg in 2012 exposed the family riches of Mr Xi and former premier Wen Jiabao.

Since taking power, Mr Xi has been vocal on the need to target both "tigers and flies" in fighting graft within the party - in a bid for the party to maintain credibility in a country whose people are increasingly angered by rampant corruption and a wide gulf in wealth equality.

Mr Xi’s leadership has also been characterised by a marked crackdown on grassroots political activism and online dissent.

Activists linked with the New Citizens’ Movement, whose campaigns have included a push for Chinese leaders to disclose their assets, have been arrested and charged with disrupting public order. Leader Xu Zhiyong, whose trial opened on Wednesday, faces up to five years in jail, attracting stern criticism from human rights groups.

The documents were obtained by the ICIJ from two offshore firms that help clients create offshore companies, trusts and bank accounts in the tax havens. It showed nearly 22,000 clients with addresses in mainland China and Hong Kong, including a real estate company co-owned by Mr Xi’s brother-in-law Deng Jiahui, and British Virgin Islands companies set up by  Mr Wen's son, Wen Yunsong, and son-in-law, Liu Chunhang.

Full Story: Xi Jinping's brother-in-law, China's elite linked to offshore tax havens

Source: Sydney Morning Herald

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