fountainhall
April 7th, 2016, 16:35
As more and more information is gleaned from the Panama Papers, one issue which has many people in the region talking is the extent of the corruption of the leadership in China. Not so much that some of its top leaders have salted away the odd $100 million for a rainy day. That’s surely par for the course with most dictatorships. In China’s case it is far more interesting discovering actually who is involved – and what might be a potentially far more serious outcome for the region.
One of the most loathed men in recent Chinese history is Li Peng, the Prime Minster in 1989 and generally known as the Butcher of Beijing - the mastermind behind the Tiananmen Square massacre. It has been known for some time that Li’s daughter, Li Xiaolin, controlled offshore holdings. Now we know that her fortune is worth an estimated US$550 million.
The current President, Xi Jinping, has made many high level enemies resulting from his very public anti-corruption campaign which has seen many senior party figures arrested and jailed. But he has failed to net any of the really big fish. Now documents show his brother-in-law held stakes in offshore companies and that his worth could be as high as $2 billion. Party rules prohibit members and their families from investing in overseas companies.
It is the fact the Xi has made so many enemies in the hierarchy and that the corruption tentacles have now reached into his own family that threatens his position. Of course, the Chinese censors have been blocking everything related to the Panama Papers, but they have a hard task as China and Hong Kong were Mossack Fonseca’s biggest source of business. Mossack Fonseca has an office in Hong Kong and franchise offices in no less than 8 cities in China.
Having lunch in Hong Kong recently with an old Chinese friend I have known for 35 years, who is a director of a major international company and is in China virtually every 10 days, the concern being talked about in Beijing some weeks ago was that President Xi’s position is so far from secure that his having to step down is now a real possibility. Step down – or be pushed out? The latter is the real fear for no-one knows what will happen thereafter. But with the release of the Panama Papers an even greater worry is starting to be expressed: that those already caught in Xi’s corruption net will seek their revenge. And that’s when things might get really ugly!
One of the most loathed men in recent Chinese history is Li Peng, the Prime Minster in 1989 and generally known as the Butcher of Beijing - the mastermind behind the Tiananmen Square massacre. It has been known for some time that Li’s daughter, Li Xiaolin, controlled offshore holdings. Now we know that her fortune is worth an estimated US$550 million.
The current President, Xi Jinping, has made many high level enemies resulting from his very public anti-corruption campaign which has seen many senior party figures arrested and jailed. But he has failed to net any of the really big fish. Now documents show his brother-in-law held stakes in offshore companies and that his worth could be as high as $2 billion. Party rules prohibit members and their families from investing in overseas companies.
It is the fact the Xi has made so many enemies in the hierarchy and that the corruption tentacles have now reached into his own family that threatens his position. Of course, the Chinese censors have been blocking everything related to the Panama Papers, but they have a hard task as China and Hong Kong were Mossack Fonseca’s biggest source of business. Mossack Fonseca has an office in Hong Kong and franchise offices in no less than 8 cities in China.
Having lunch in Hong Kong recently with an old Chinese friend I have known for 35 years, who is a director of a major international company and is in China virtually every 10 days, the concern being talked about in Beijing some weeks ago was that President Xi’s position is so far from secure that his having to step down is now a real possibility. Step down – or be pushed out? The latter is the real fear for no-one knows what will happen thereafter. But with the release of the Panama Papers an even greater worry is starting to be expressed: that those already caught in Xi’s corruption net will seek their revenge. And that’s when things might get really ugly!