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Caixin Article: Digging behind the Capital Empire of the Anbang Insurance Group

The Sina website recently carried an article on how the Anbang Insurance Group (a Chinese holding company whose subsidiaries deal mainly with insurance, banking, and financial services) grew from a company with registered capital of 500 million yuan (US$72 million) in 2004 to 61.9 billion yuan (US$8.97 billion) in 2017. The source of the article was Caixin’s 2017 17th edition. The article found that Anbang was under suspicion for faking the registered capital that it used for the insurance fund under its control. According to the article, Anbang has gone through seven major capital growth spurts since 2014. The analysis of its capital structure and stockholders indicates that behind its 37 stockholders, the company sits on a network of 101 companies and 86 stockholders and that all of them can be traced to the relatives of Wu Xiaohui, Chief Executive Officer of Anbang in Zhejiang Province. In the international market, Anbang has been aggressively acquiring insurance companies, banks, and real estate in Europe, the U.S., and Korea, including the Waldorf Hotel in New York City in 2014. However, starting in 2016 Anbang has faced major obstacles in its overseas acquisitions. It failed in the US$14 billion acquisition of the Starwood Hotel as well as the acquisition of Fidelity & Guaranty Life, due to its inability to meet the company’s stockholder disclosure requirements that the Department of NY Financial Services had set.

According to an article that Apple Daily published on February 3, 2015, Wu Xiaohui, Anbang’s CEO, was reported to be separated from his wife, who is the second daughter of Deng Xiaoping. The couple got married in 2004. It was Wu’s third marriage. It is believed that Wu used his relationship to start Anbang and that the separation was an indication that Deng’s family wants to cut its ties with the Anbang group.

Source:
Caixin, April 29, 2017
http://finance.caixin.com/2017-04-29/101084867.html/
Sina, April 29, 2017
http://www.sina.com.cn/midpage/mobile/index.d.html?docID=fyetwtf8994622&url=finance.sina.cn/insurance/hydt/2017-04-29/detail-ifyetwtf8994622.d.html
Apple Daily, February 3, 2015
http://hk.apple.nextmedia.com/international/art/20150203/19027111

China’s New Anti-Corruption Moves

Radio France International (RFI) reported that China has adopted two new anti-corruption measures that may be used against high-ranking officials.

The first one is that the Supreme People’s Procuratorate’s website for reporting corrupt officials allows people to report top ranking officials. The drop down list for the Official Rank field includes “state-level officials” which is the highest rank in China. At first, the options were “State-Level – Members of the Party’s Politburo Standing Committee,” “Vice State-Level – Members of the Party’s Politburo, Vice Premier, State Council Members,” … “Clerk,” and “Unranked Cadres.”

However, visiting the website now, the Official Rank field has been changed to an input box from the dropdown list. It is up to those making the report to write in the rank.

The second one is the re-issuance of “Regulations on Leading Cadres’ Reporting Personal Matters” and “Measures on Handling the Check Result of leading Cadres’ Reporting Personal Matters.”

Xinhua published an article with the Party’s Organization Department’s answers to some questions regarding the Regulation and the Measures. It said that “the Regulation is to focus on a ‘few key people,’ or the Party’s and government’s top officials.” “The other one is to focus on the family affairs and assets of the cadres. Family affairs include marriage, passports and visits to other countries for personal reasons, immigration to other countries, business, and whether they are under investigation. Family assets include income, proceeds from services, real estate, stock, mutual funds, insurance with an investment focus, business, and savings and investments overseas.

Sources:
1. RFI, April 20, 2017
http://cn.rfi.fr/中国/20170420-反腐新姿态-可举报常委级领导人-官员需报国外财产与家人
2. Xinhua, April 19, 2017
http://news.xinhuanet.com/politics/2017-04/19/c_1120839564.htm

Beijing City Encourages People to “Capture Spies”

Voice of America (VOA) reported that the Beijing Municipal State Security Bureau issued a regulation concerning, “Award Methods for Citizens to Report Spy Activities.”

“According to the regulation, citizens can communicate through a phone call, letter, or face-to-face reporting methods to ‘report spy activity to the Beijing Municipal State Security Bureau. If the clue is useful, those who report the information can receive awards ranging between 10,000 Yuan (U.S. $1,492) and 500,000 Yuan.’”

“However, this frightened many people who had experienced Mao Zedong’s time (the 1950s to the 1970s).”

“Mao promoted ‘anti-spy’ and ‘capture spy’ movements. During their peak time, thousands of spies from the U.S. and the USSR were ‘found’ and many families were torn apart. There was countless evidence proving that the then President of China Liu Shaoqi was a traitor and his wife was a strategic spy from the U.S.”

“After Mao’s death, the Communist Party obtained countless evidence that the previous thousands of spies were wrongfully indicted. Liu Shaoqi was not a traitor but rather a great leader of China and his wife was not a U.S. spy, either.”

Source: VOA, April 20, 2017
http://www.voachinese.com/a/news-beijing-offers-hefty-cash-reward-for-spy-tip-20170410/3803973.html

Did China Stop the VOA Interview of Guo Wengui?

China is reported to have interfered with a Voice of America (VOA) interview of Guo Wengui (郭文贵) and to cause VOA to stop airing its interview. Guo is a business tycoon who fled from China because he feared being arrested for bribing officials. Once he came to the U.S., on multiple occasions, Guo revealed the corruption of top level officials, including in the VOA interview.

The Chinese government has accused Guo of bribery and has tried to bring him back to China. After the VOA interview event, China aired a video recording in which Ma Jian, former Deputy Minister of State Security who had been taken down for corruption, confessed to receiving money from Guo.

On April 21, Lu Kang, the Spokesperson for the Ministry of Foreign Affairs received several questions from Western media about this incident:

VOA reporter: During his interview with VOA, Guo Wengui brought up some sensitive things about sensitive people, including Xi Jinping and Wang Qishan. Is what he said true? Do you have any comments? Also, China issued a Red Notice on Guo Wengui to Interpol just before the interview. Was it a coincidence or was it on purpose?

Lu Kang: For the first question, we have said that Guo Wengui was a criminal suspect under Interpol’s Red Notice. So if you choose to believe what he said, that’s your thing. We don’t believe it. For the second question, Interpol is the second largest international organization among governments, with over 100 years of history and 190 members. We trust that it is serious about what it does.

BBC reporter: Just another follow up, again a point of clarification on the question that was already answered before. The question is about the VOA interview that was stopped and was kept from proceeding. Am I right in assuming that you are saying the Chinese government was not involved in it whatsoever?

Lu Kang: I think the VOA reporter asked the question just now and I have clearly answered it.

Agence France-Presse (AFP) reporter: The first one is to follow up on the previous question. It was reported that the Chinese embassy reached out to VOA and contacted them directly and asked them not to air the interview of Guo Wengui. So is that not the case? Can you confirm that?

Lu Kang: VOA itself did not ask this question. Why are you so interested in it?

{Editor’s note: Asia News reported, “Guo wanted to speak about corruption among China’s Communist leaders. Beijing got Interpol to issue an arrest warrant against him.”}

Sources:
VOA, April 21, 2017
http://www.voachinese.com/a/guo-wengui-interview-20170421/3820414.html
Asia News, April 22, 2017
http://www.asianews.it/news-en/Voice-of-America-cuts-interview-with-Guo-Wengui-over-rampant-corruption-in-China-40542.html

Epoch Times: China Increases Spying Activities Overseas

Epoch Times, an overseas Chinese media, published an article that summarized the spying activities of overseas Chinese as reported in the media of Japan, Germany, and the U.S. It quoted an article published on April 17 in Shukan Taishu magazine in Japan which claimed that there could be as many as 50,000 Chinese spies in Japan. The article stated that China has built a giant spy network in Japan using Chinese students, scholars, professional workers, waiters or waitresses, and massage therapists. According to the report, some female spies would marry members of the Japan Self-Defense Forces in order to collect information.

On April 17, Les Échos, (a newspaper that the article identifies as German) published an article stating that the Department of the Interior of Hessen Germany recently issued a warning that Chinese spies are active on Linked In and Facebook where they pretend to be scientists, government officials, consultants, or human resource representatives. They target German municipalities, army officials, diplomats, scientists, and college students. The warning also requested that any suspicious activities should be reported to the security agency in Germany immediately. It is reported that there are close to 600 Chinese companies and over 10,000 Chinese citizens working in Hessen.

Meanwhile Newsweek in the U.S. recently reported that the China’s security agency has constantly been recruiting American Chinese who work in defense, security agencies or highly sensitives industries to conduct spying activities. The recent trend shows that the recruitment has expanded to Americans. Typical examples include Glenn Duffie Shriver who tried to apply for a position with the CIA and Candace Claiborne who works for the Department of State. The Epoch Times article also mentioned that in a separate publication, it covers reports on how foreign security agencies monitor activities of Chinese student associations or overseas Chinese associations that have close ties with China, while arresting or deporting those who spy for China.

Source: Epoch Times, April 17, 2017
http://www.epochtimes.com/gb/17/4/18/n9051300.htm

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