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Offshore Companies and Hong Kong Residence Status Scandals Involving Top Level Officials

The Panama Files have revealed that several top level Chinese Communist Party (CCP) officials, including retired officials, have had their family members set up offshore companies.

Recently, four Hong Kong media, after receiving documents from ICIJ (the International Consortium of Investigative Journalists) regarding the related Panama Files, conducted investigations of those relatives of top officials and found several of them had Hong Kong residence status. These four media are Mingpao, South China Morning Post, Next Magazine, and Hong Kong 01.

The related officials are:

Liu Yunshan (刘云山), current Politburo Standing Committee member: Liu’s daughter-in-law Jia Liqing (贾立青) is the shareholder and board member of an offshore company. She obtained her Hong Kong residence card in 2001.

Zhang Gaoli (张高丽), current Politburo Standing Committee member: Zhang’s son-in-law Li Shenpo (李圣泼) is a shareholder in three offshore companies. Li and her wife Zhang Xiaoyan (张晓燕) have Hong Kong residence status.

Li Peng (李鹏), former Premier and former Politburo Standing Committee member: Li’s daughter Li Xiaolin (李小琳) is a shareholder and board member of an offshore company. She has Hong Kong residence status.

Jia Qinglin (贾庆林), former Politburo Standing Committee member: Jia’s granddaughter Li Zidan (李紫丹) owns an offshore company. Both Li Zidan and her father Li Botan (李伯潭) (Jia’s son-in-law) have Hong Kong residence status.

Zeng Qinghong (曾庆红), former Politburo Standing Committee member: Zeng’s brother Zeng Qinghuai (曾庆淮) is the shareholder of an offshore company.

Deng Xiaoping (邓小平), former paramount leader: Deng’s niece Li Xiaobing (栗小兵) and her husband Yu Yiping (俞一平) became Hongkongese in 1994.

Two other officials are related but their relative’s companies were either closed or are not active:

Xi Jinping (习近平), current top leader: Xi’s brother-in-law Deng Jiagui (邓家贵) was the shareholder and board member of two offshore companies. Deng closed the companies in 2012 when Xi became the top leader.

Hu Yaobang (胡耀邦), former CCP General Secretary: Hu’s son, Hu Dehua (胡德华) was the shareholder and board member of an offshore company, Fortalent International Holdings, Ltd. Hu Dehua explained that he registered that company to help his other company to go through an IPO in Hong Kong, so his registration used all real information, including has name, Chinese passport, and address. The Hong Kong IPO didn’t work out. He hasn’t run any business through Fortalent since, nor does Fortalent have any assets. He just felt there was no need to close the company.

Sources:
1. BBC Chinese, April 6, 2016
http://www.bbc.com/zhongwen/simp/china/2016/04/160406_panama_papers_china_capital_outflows
2. RFA, May 4, 2016
http://www.rfa.org/cantonese/news/hk-secretfiles-05042016095619.html
3. South China Morning Post, April 8, 2016
http://www.nanzao.com/sc/national/153f3d1c34c61cb/ba-na-ma-wen-jian-pu-li-an-gong-si-hu-de-hua-tang-tang-zheng-zheng

Briefings | | |   Government/Politics

Xi Jinping: Anti-Corruption Campaign Improves China’s Image

On May 3, 2016, People’s Daily published the full text of the speech Xi Jinping’s gave on January 12, 2016, at the Sixth Plenary Session of the CCP Central Discipline Inspection Commission. The speech was 12, 000 Chinese characters in length. During the speech, Xi discussed how the anti-corruption campaign has helped China’s relationship with other countries.  

“Because we firmly oppose corruption, we have taken over the international moral high ground. In the past, the United States and other Western countries always created difficulties for us on the anti-corruption issue and constantly raised the so-called anti-corruption issues at the United Nations, the Group of Twenty, APEC, and on other occasions. Now, in one swoop, we have obtained strategic advantages in the international arena. We have strengthened international multilateral and bilateral cooperation against corruption. We have started the ‘heaven’s vengeance action’ to intensify the efforts to track down stolen goods and to bring to justice criminals who fled the country years ago. We have offered a series of initiatives on international cooperation to counter corruption including the initiative to build a new international anti-corruption order. In particular, we have increased pressure on the United States and other Western countries in terms of anti-corruption cooperation, asking them not to become a ‘safe paradise’ where corrupt elements can evade being held accountable. Criminal suspects that these countries initially think are cards in their hands to play against us have now become hot potatoes in their hands. Various countries admire our resolve to show our swords against corruption. Our anti-corruption actions have won the respect of the international community.”
“In 2015, a National Bureau of Statistics survey showed that 91.5 percent of the people expressed satisfaction with the effectiveness of the clean government and anti-corruption work. A Chinese Academy of Social Sciences survey showed that 93.7 percent of the leading cadres, 92.8 percent of ordinary cadres, 87.9 percent of corporate officers, and 86.9 percent of urban and rural residents in China expressed confidence in the anti-corruption campaign.” 

Source: People’s Daily, May 3, 2016 
http://paper.people.com.cn/rmrb/html/2016-05/03/nw.D110000renmrb_20160503_1-02.htm 

Briefings | | |   Government/Politics

Xi Jinping’s Recent Speeches Published in Full Text

On April 30, 2016, Qiushi, a semi-monthly publication of the Central Committee of the Chinese Communist Party (CCP), published the full text of Xi Jinping’s speech given at the CCP Central Party School on December 11, 2015. Other speeches published recently in full text include Xi’s speech at the Sixth Plenary Session of the CCP Central Discipline Inspection Commission in January 2016, and his speech at the Internet Security and Information Technology Forum on April 19, 2016. Analysts observed that the purpose of such publications is to avoid the State media’s manipulation of Xi’s words when quoting from his speeches and to allow a full understanding of his intent within the context of the entire speech. 

During his speech at the Party School in December 2016, Xi mentioned a number of the Party School’s problems. “The Party School is a school, but it is not an ordinary school. It is the school where the Party educates and trains its backbone personnel to govern the country. Thus it must meet higher political expectations. In the past, I heard reports that some people spread Western capitalist values when delivering lectures at the Party School; some with loose lips made improper comments about the Party and about State policies; some did nothing but nitpick and complain without having any basis; and others inappropriately participated in social events in the name of the Party School Although these phenomena occur among a small group of people, the impact is very bad. Problems like these cannot occur in the school!”  Xi asked that the Party School abide by the Party’s political discipline and rules, and said it should be in line with the CCP Central Committee. “If the Party School cannot be in line with the CCP Central Committee, how can it guide students to be in line with the CCP Central Committee?" 
Source: Qiushi, April 30, 2016 
http://www.qstheory.cn/dukan/qs/2016-04/30/c_1118772415.htm
Briefings | | |   Government/Politics

Beijing Experiments with Textbooks for Peking Opera

To maintain and expand the heritage of Chinese culture, the Beijing Middle School Peking Opera Textbook Writing Committee and the Beijing Chinese Culture Heritage Association jointly created a set of textbooks to teach students Peking Opera. The set, designed for students taking Peking Opera as an elective, contains three books: The Peking Opera That You Can See, The Peking Opera That You Can Listen To, and The Peking Opera That You Can Learn.

The textbooks are currently undergoing a pilot test in the Fengtai District.

Source: Xinhua, May 3, 2016
http://news.xinhuanet.com/local/2016-05/03/c_128950735.htm

Briefings | | |   Government/Politics

Guangdong Writer: Stop Government Funding of the Communist Youth League

Hang Yiwei, a writer from Guangdong Province, posted a blog on Phoenix regarding the Communist Youth League’s budget.

Hang said, "The Youth League Central Committee recently published its budget for fiscal year 2016. It receives a fiscal appropriation of 306 million yuan (US$47 million), or 50.93 percent less than the 624 million yuan from 2015. However, it means that the Youth League Central Committee still enjoys state funding of over 300 million yuan. It is not a very normal situation for the Youth League, a non-government organization, to live on the state’s funding. Therefore, it makes perfect sense for the Youth League Central Committee to further reduce another 300 million yuan from its FY 2016 budget [which will end up as 0 yuan of the taxpayer’s money]."

Source: Phoenix, May 2, 2016
http://blog.ifeng.com/article/44662026.html

Briefings | | |   Government/Politics

RFA: Arrest of Senior Officials in Financial Industries Exposes Hidden Plots in Chinese Stock Market

RFA published an article stating that the arrest of Xu Xiang, former Chinese private placement investor and the General Manager of Zexi Investments (泽熙投资), a Chinese investment company, and Chen Boming, General Manager of CITIC securities, reveals that the stock market in China is full of hidden plots from which a small group of people have benefitted. The market should have been regulated a long time ago.

RFA interviewed an economics professor from the Beijing Institute of Technology who observed, “The China Capital market is no doubt the darkest market; it is full of hidden trades behind closed doors and involves a number of illegal activities. It has been used to supply funding to the failing SOEs. A large number of low performance companies have been repackaged and have gone through the IPO procedure. A small number of special interest parties, who use their power to manipulate the market, were the ones backing them. Xu Xiang and Chen Boming are just two of the examples of this special interest group. The supervision and regulatory department should use this opportunity to establish regulations for the Chinese stock market and make it more transparent.”

Source: Radio Free Asia, April 29, 2016
http://www.rfa.org/mandarin/yataibaodao/renquanfazhi/hc-04292016103143.html

Briefings | | |   Government/Politics

Xinhua: Legally Registered Social Organizations Now More than 660,000

Xinhua reported that, according to the Ministry of Civil Affairs, by the end of first quarter of 2016, there were 664,800 registered social organizations including 329,000 social groups, 4,841 foundations, and 331,000 private non-enterprise units in China. The article stated that the private non-enterprise units have grown and now account for 50 percent of the social organizations. They include non-profit private schools, hospitals, senior homes, museums and other categories. Xinhua said that, starting September 1, 2016, following the revision in the Charity Law, private non-enterprise units will be called social service agencies. They will include the agencies that provide assistance to people with disabilities, exploited children, and low income families.

Source: Xinhua, May 1, 2016
http://news.xinhuanet.com/politics/2016-05/01/c_1118781773.htm

Briefings | | |   Government/Politics

RFA: Central Administration Issued Directives to Stop Using Slang Words for Xi Jinping

Radio Free Asia carried an article which stated that, based on a report from Hong Kong Ming Pao, China’s central administration recently issued a directive, through the Propaganda Department, asking the local administrations not to make casual modifications of the official statements from the central administration. The directive also asked that slang words, such as “Core” (“核心”) or “Xi Da Da” (“习大大”), not be used when referring to Xi Jinping and that slang words such as Peng Mama (“彭麻麻”) not be used when referring to Xi’s wife. The article pointed out that these slang words have often been used in Chinese official microblogs or in Xinhua. Since last year, songs that had a personality cult flavor and which praised Xi Jinping have even circulated on the Internet. These have caused concern among the Chinese people who fear the return of the Cultural Revolution. Hong Kong Apple Daily reported that Xi Jinping has noticed the negative impact of these terms and told the Propaganda Department not to use these phrases and to delete any flattering contents about him.

Source: Radio Free Asia, April 29, 2016
http://www.rfa.org/mandarin/yataibaodao/zhengzhi/xl1-04292016100501.html

Briefings | | |   Government/Politics