Billions in Hidden Riches for Family of Chinese Leader (NYT)

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http://www.nytimes.com/2012/10/26/business/global/family-of-wen-jiabao-holds-a-hidden-fortune-in-china.html

Billions in Hidden Riches for Family of Chinese Leader
By DAVID BARBOZA

BEIJING — 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,” the prime minister, Wen Jiabao, 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.

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 have a knack for aggressive deal-making, including his wife, have controlled assets worth at least $2.7 billion. ...

[formercia]

1. Unregulated Capitalism

works the same in China, as it does here in the US.

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2. China Blocks Web Access to Times After Article

http://www.nytimes.com/2012/10/26/world/asia/china-blocks-web-access-to-new-york-times.html

China Blocks Web Access to Times After Article
By KEITH BRADSHER

HONG KONG — The Chinese government swiftly blocked access early Friday morning to the Chinese-language Web site of The New York Times from computers in mainland China and gradually halted access to the English-language site as well in response to the news organization’s decision to post an article in both languages describing wealth accumulated by the family of the country’s prime minister.

The authorities were also blocking attempts to mention The Times or the prime minister, Wen Jiabao, in postings on Sina Weibo, an extremely popular mini-blogging service in China that resembles Twitter.

The Foreign Ministry spokesman on duty in Beijing early Friday morning did not immediately answer phone calls for comment.

China maintains the world’s most extensive and sophisticated system for Internet censorship, employing tens of thousands of people to monitor what is said, delete entries that contravene the country’s extensive and unpublished regulations and even write new entries that are favorable to the government. ...

[Selatius]

3. I bet most of that wealth was built off of contracts with companies that moved to China.

You get to build factories in mainland China and are largely left alone.

In exchange, the Chinese leadership gets a cut of the profits and seats on the board of the joint-venture chartered.

Many large firms inside China are partially owned by the State, so some of the profits that the firm generates automatically go to the State. It's China's answer to a socialist market economy.