Friday, October 26, 2012

• Billions in Hidden Riches for Chinese Leader "Wen Jiabao"


"Wen Jiabao"
by DAVID BARBOZA - Published: October 25, 2012




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

In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners. Untangling their financial holdings provides an unusually detailed look at how politically connected people have profited from being at the intersection of government and business as state influence and private wealth converge in China’s fast-growing economy.

Unlike most new businesses in China, the family’s ventures sometimes received financial backing from state-owned companies, including China Mobile, one of the country’s biggest phone operators, the documents show. At other times, the ventures won support from some of Asia’s richest tycoons. The Times found that Mr. Wen’s relatives accumulated shares in banks, jewelers, tourist resorts, telecommunications companies and infrastructure projects, sometimes by using offshore entities.

The holdings include a villa development project in Beijing; a tire factory in northern China; a company that helped build some of Beijing’s Olympic stadiums, including the well-known “Bird’s Nest”; and Ping An Insurance, one of the world’s biggest financial services companies.

As prime minister in an economy that remains heavily state-driven, Mr. Wen, who is best known for his simple ways and common touch, more importantly has broad authority over the major industries where his relatives have made their fortunes. Chinese companies cannot list their shares on a stock exchange without approval from agencies overseen by Mr. Wen, for example. He also has the power to influence investments in strategic sectors like energy and telecommunications.

Because the Chinese government rarely makes its deliberations public, it is not known what role — if any — Mr. Wen, who is 70, has played in most policy or regulatory decisions. But in some cases, his relatives have sought to profit from opportunities made possible by those decisions.

The prime minister’s younger brother, for example, has a company that was awarded more than $30 million in government contracts and subsidies to handle wastewater treatment and medical waste disposal for some of China’s biggest cities, according to estimates based on government records. The contracts were announced after Mr. Wen ordered tougher regulations on medical waste disposal in 2003 after the SARS outbreak.

In 2004, after the State Council, a government body Mr. Wen presides over, exempted Ping An Insurance and other companies from rules that limited their scope, Ping An went on to raise $1.8 billion in an initial public offering of stock. Partnerships controlled by Mr. Wen’s relatives — along with their friends and colleagues — made a fortune by investing in the company before the public offering.

In 2007, the last year the stock holdings were disclosed in public documents, those partnerships held as much as $2.2 billion worth of Ping An stock, according to an accounting of the investments by The Times that was verified by outside auditors. Ping An’s overall market value is now nearly $60 billion.

Ping An said in a statement that the company did “not know the background of the entities behind our shareholders.” The statement said, “Ping An has no means to know the intentions behind shareholders when they buy and sell our shares.”

While Communist Party regulations call for top officials to disclose their wealth and that of their immediate family members, no law or regulation prohibits relatives of even the most senior officials from becoming deal-makers or major investors — a loophole that effectively allows them to trade on their family name. Some Chinese argue that permitting the families of Communist Party leaders to profit from the country’s long economic boom has been important to ensuring elite support for market-oriented reforms.

Even so, the business dealings of Mr. Wen’s relatives have sometimes been hidden in ways that suggest the relatives are eager to avoid public scrutiny, the records filed with Chinese regulatory authorities show. Their ownership stakes are often veiled by an intricate web of holdings as many as five steps removed from the operating companies, according to the review.

In the case of Mr. Wen’s mother, The Times calculated her stake in Ping An — valued at $120 million in 2007 — by examining public records and government-issued identity cards, and by following the ownership trail to three Chinese investment entities. The name recorded on his mother’s shares was Taihong, a holding company registered in Tianjin, the prime minister’s hometown.

The apparent efforts to conceal the wealth reflect the highly charged politics surrounding the country’s ruling elite, many of whom are also enormously wealthy but reluctant to draw attention to their riches. When Bloomberg News reported in June that the extended family of Vice President Xi Jinping, set to become China’s next president, had amassed hundreds of millions of dollars in assets, the Chinese government blocked access inside the country to the Bloomberg Web site.

“In the senior leadership, there’s no family that doesn’t have these problems,” said a former government colleague of Wen Jiabao who has known him for more than 20 years and who spoke on the condition of anonymity. “His enemies are intentionally trying to smear him by letting this leak out.”

The Times presented its findings to the Chinese government for comment. The Foreign Ministry declined to respond to questions about the investments, the prime minister or his relatives. Members of Mr. Wen’s family also declined to comment or did not respond to requests for comment.

Duan Weihong, a wealthy businesswoman whose company, Taihong, was the investment vehicle for the Ping An shares held by the prime minister’s mother and other relatives, said the investments were actually her own. Ms. Duan, who comes from the prime minister’s hometown and is a close friend of his wife, said ownership of the shares was listed in the names of Mr. Wen’s relatives in an effort to conceal the size of Ms. Duan’s own holdings.

“When I invested in Ping An I didn’t want to be written about,” Ms. Duan said, “so I had my relatives find some other people to hold these shares for me.”

But it was an “accident,” she said, that her company chose the relatives of the prime minister as the listed shareholders — a process that required registering their official ID numbers and obtaining their signatures. Until presented with the names of the investors by The Times, she said, she had no idea that they had selected the relatives of Wen Jiabao.

The review of the corporate and regulatory records, which covers 1992 to 2012, found no holdings in Mr. Wen’s name. And it was not possible to determine from the documents whether he recused himself from any decisions that might have affected his relatives’ holdings, or whether they received preferential treatment on investments.

For much of his tenure, Wen Jiabao has been at the center of rumors and conjecture about efforts by his relatives to profit from his position. Yet until the review by The Times, there has been no detailed accounting of the family’s riches.

His wife, Zhang Beili, is one of the country’s leading authorities on jewelry and gemstones and is an accomplished businesswoman in her own right. By managing state diamond companies that were later privatized, The Times found, she helped her relatives parlay their minority stakes into a billion-dollar portfolio of insurance, technology and real estate ventures.

The couple’s only son sold a technology company he started to the family of Hong Kong’s richest man, Li Ka-shing, for $10 million, and used another investment vehicle to establish New Horizon Capital, now one of China’s biggest private equity firms, with partners like the government of Singapore, according to records and interviews with bankers.

The prime minister’s younger brother, Wen Jiahong, controls $200 million in assets, including wastewater treatment plants and recycling businesses, the records show.

As prime minister, Mr. Wen has staked out a position as a populist and a reformer, someone whom the state-run media has nicknamed “the People’s Premier” and “Grandpa Wen” because of his frequent outings to meet ordinary people, especially in moments of crisis like natural disasters.

While it is unclear how much the prime minister knows about his family’s wealth, State Department documents released by the WikiLeaks organization in 2010 included a cable that suggested Mr. Wen was aware of his relatives’ business dealings and unhappy about them.

“Wen is disgusted with his family’s activities, but is either unable or unwilling to curtail them,” a Chinese-born executive working at an American company in Shanghai told American diplomats, according to the 2007 cable.

China’s ‘Diamond Queen’
It is no secret in China’s elite circles that the prime minister’s wife, Zhang Beili, is rich, and that she has helped control the nation’s jewelry and gem trade. But her lucrative diamond businesses became an off-the-charts success only as her husband moved into the country’s top leadership ranks, the review of corporate and regulatory records by The Times found.

A geologist with an expertise in gemstones, Ms. Zhang is largely unknown among ordinary Chinese. She rarely travels with the prime minister or appears with him, and there are few official photographs of the couple together. And while people who have worked with her say she has a taste for jade and fine diamonds, they say she usually dresses modestly, does not exude glamour and prefers to wield influence behind the scenes, much like the relatives of other senior leaders.

The State Department documents released by WikiLeaks included a suggestion that Mr. Wen had once considered divorcing Ms. Zhang because she had exploited their relationship in her diamond trades. Taiwanese television reported in 2007 that Ms. Zhang had bought a pair of jade earrings worth about $275,000 at a Beijing trade show, though the source — a Taiwanese trader — later backed off the claim and Chinese government censors moved swiftly to block coverage of the subject in China, according to news reports at the time.

“Her business activities are known to everyone in the leadership,” said one banker who worked with relatives of Wen Jiabao. The banker said it was not unusual for her office to call upon businesspeople. “And if you get that call, how can you say no?”

Zhang Beili first gained influence in the 1990s, while working as a regulator at the Ministry of Geology. At the time, China’s jewelry market was still in its infancy.

While her husband was serving in China’s main leadership compound, known as Zhongnanhai, Ms. Zhang was setting industry standards in the jewelry and gem trade. She helped create the National Gemstone Testing Center in Beijing, and the Shanghai Diamond Exchange, two of the industry’s most powerful institutions.

In a country where the state has long dominated the marketplace, jewelry regulators often decided which companies could set up diamond-processing factories, and which would gain entry to the retail jewelry market. State regulators even formulated rules that required diamond sellers to buy certificates of authenticity for any diamond sold in China, from the government-run testing center in Beijing, which Ms. Zhang managed.

As a result, when executives from Cartier or De Beers visited China with hopes of selling diamonds and jewelry here, they often went to visit Ms. Zhang, who became known as China’s “diamond queen.”

“She’s the most important person there,” said Gaetano Cavalieri, president of the World Jewelry Confederation in Switzerland. “She was bridging relations between partners — Chinese and foreign partners.”

As early as 1992, people who worked with Ms. Zhang said, she had begun to blur the line between government official and businesswoman. As head of the state-owned China Mineral and Gem Corporation, she began investing the state company’s money in start-ups. And by the time her husband was named vice premier, in 1998, she was busy setting up business ventures with friends and relatives.

The state company she ran invested in a group of affiliated diamond companies, according to public records. Many of them were run by Ms. Zhang’s relatives — or colleagues who had worked with her at the National Gemstone Testing Center.

In 1993, for instance, the state company Ms. Zhang ran helped found Beijing Diamond, a big jewelry retailer. A year later, one of her younger brothers, Zhang Jianming, and two of her government colleagues personally acquired 80 percent of the company, according to shareholder registers. Beijing Diamond invested in Shenzhen Diamond, which was controlled by her brother-in-law, Wen Jiahong, the prime minister’s younger brother.

Among the successful undertakings was Sino-Diamond, a venture financed by the state-owned China Mineral and Gem Corporation, which she headed. The company had business ties with a state-owned company managed by another brother, Zhang Jiankun, who worked as an official in Jiaxing, Ms. Zhang’s hometown, in Zhejiang Province.

In the summer of 1999, after securing agreements to import diamonds from Russia and South Africa, Sino-Diamond went public, raising $50 million on the Shanghai Stock Exchange. The offering netted Ms. Zhang’s family about $8 million, according to corporate filings.

Although she was never listed as a shareholder, former colleagues and business partners say Ms. Zhang’s early diamond partnerships were the nucleus of a larger portfolio of companies she would later help her family and colleagues gain a stake in.

The Times found no indication that Wen Jiabao used his political clout to influence the diamond companies his relatives invested in. But former business partners said that the family’s success in diamonds, and beyond, was often bolstered with financial backing from wealthy businessmen who sought to curry favor with the prime minister’s family.

“After Wen became prime minister, his wife sold off some of her diamond investments and moved into new things,” said a Chinese executive who did business with the family. He asked not to be named because of fear of government retaliation. Corporate records show that beginning in the late 1990s, a series of rich businessmen took turns buying up large stakes in the diamond companies, often from relatives of Mr. Wen, and then helped them reinvest in other lucrative ventures, like real estate and finance.

According to corporate records and interviews, the businessmen often supplied accountants and office space to investment partnerships partly controlled by the relatives.

“When they formed companies,” said one businessman who set up a company with members of the Wen family, “Ms. Zhang stayed in the background. That’s how it worked.”

The Only Son
Late one evening early this year, the prime minister’s only son, Wen Yunsong, was in the cigar lounge at Xiu, an upscale bar and lounge at the Park Hyatt in Beijing. He was having cocktails as Beijing’s nouveau riche gathered around, clutching designer bags and wearing expensive business suits, according to two guests who were present. 

In China, the children of senior leaders are widely believed to be in a class of their own. Known as “princelings,” they often hold Ivy League degrees, get V.I.P. treatment, and are even offered preferred pricing on shares in hot stock offerings.

They are also known as people who can get things done in China’s heavily regulated marketplace, where the state controls access. And in recent years, few princelings have been as bold as the younger Mr. Wen, who goes by the English name Winston and is about 40 years old.

A Times review of Winston Wen’s investments, and interviews with people who have known him for years, show that his deal-making has been extensive and lucrative, even by the standards of his princeling peers.

State-run giants like China Mobile have formed start-ups with him. In recent years, Winston Wen has been in talks with Hollywood studios about a financing deal.

Concerned that China does not have an elite boarding school for Chinese students, he recently hired the headmasters of Choate and Hotchkiss in Connecticut to oversee the creation of a $150 million private school now being built in the Beijing suburbs.

Winston Wen and his wife, moreover, have stakes in the technology industry and an electric company, as well as an indirect stake in Union Mobile Pay, the government-backed online payment platform — all while living in the prime minister’s residence, in central Beijing, according to corporate records and people familiar with the family’s investments.

“He’s not shy about using his influence to get things done,” said one venture capitalist who regularly meets with Winston Wen.
The younger Mr. Wen declined to comment. But in a telephone interview, his wife, Yang Xiaomeng, said her husband had been unfairly criticized for his business dealings.
“Everything that has been written about him has been wrong,” she said. “He’s really not doing that much business anymore.”

Winston Wen was educated in Beijing and then earned an engineering degree from the Beijing Institute of Technology. He went abroad and earned a master’s degree in engineering materials from the University of Windsor, in Canada, and an M.B.A. from the Kellogg School of Business at Northwestern University in Evanston, Ill., just outside Chicago.

When he returned to China in 2000, he helped set up three successful technology companies in five years, according to people familiar with those deals. Two of them were sold to Hong Kong businessmen, one to the family of Li Ka-shing, one of the wealthiest men in Asia.

Winston Wen’s earliest venture, an Internet data services provider called Unihub Global, was founded in 2000 with $2 million in start-up capital, according to Hong Kong and Beijing corporate filings. Financing came from a tight-knit group of relatives and his mother’s former colleagues from government and the diamond trade, as well as an associate of Cheng Yu-tung, patriarch of Hong Kong’s second-wealthiest family. The firm’s earliest customers were state-owned brokerage houses and Ping An, in which the Wen family has held a large financial stake.

He made an even bolder move in 2005, by pushing into private equity when he formed New Horizon Capital with a group of Chinese-born classmates from Northwestern. The firm quickly raised $100 million from investors, including SBI Holdings, a division of the Japanese group SoftBank, and Temasek, the Singapore government investment fund.

Under Mr. Wen, New Horizon established itself as a leading private equity firm, investing in biotech, solar, wind and construction equipment makers. Since it began operations, the firm has returned about $430 million to investors, a fourfold profit, according to SBI Holdings.

“Their first fund was dynamite,” said Kathleen Ng, editor of Asia Private Equity Review, an industry publication in Hong Kong. “And that allowed them to raise a lot more money.”

Today, New Horizon has more than $2.5 billion under management.
Some of Winston Wen’s deal-making, though, has attracted unwanted attention for the prime minister.
In 2010, when New Horizon acquired a 9 percent stake in a company called Sihuan Pharmaceuticals just two months before its public offering, the Hong Kong Stock Exchange said the late-stage investment violated its rules and forced the firm to return the stake. Still, New Horizon made a $46.5 million profit on the sale.

Soon after, New Horizon announced that Winston Wen had handed over day-to-day operations and taken up a position at the China Satellite Communications Corporation, a state-owned company that has ties to the Chinese space program. He has since been named chairman.

The Tycoons
In the late 1990s, Duan Weihong was managing an office building and several other properties in Tianjin, the prime minister’s hometown in northern China, through her property company, Taihong. She was in her 20s and had studied at the Nanjing University of Science and Technology.

Around 2002, Ms. Duan went into business with several relatives of Wen Jiabao, transforming her property company into an investment vehicle of the same name. The company helped make Ms. Duan very wealthy.

It is not known whether Ms. Duan, now 43, is related to the prime minister. In a series of interviews, she first said she did not know any members of the Wen family, but later described herself as a friend of the family and particularly close to Zhang Beili, the prime minister’s wife. As happened to a handful of other Chinese entrepreneurs, Ms. Duan’s fortunes soared as she teamed up with the relatives and their network of friends and colleagues, though she described her relationship with them involving the shares in Ping An as existing on paper only and having no financial component.

Ms. Duan and other wealthy businesspeople — among them, six billionaires from across China — have been instrumental in getting multimillion-dollar ventures off the ground and, at crucial times, helping members of the Wen family set up investment vehicles to profit from them, according to investment bankers who have worked with all parties.

Established in Tianjin, Taihong had spectacular returns. In 2002, the company paid about $65 million to acquire a 3 percent stake in Ping An before its initial public offering, according to corporate records and Ms. Duan’s graduate school thesis. Five years later, those shares were worth $3.7 billion

The company’s Hong Kong affiliate, Great Ocean, also run by Ms. Duan, later formed a joint venture with the Beijing government and acquired a huge tract of land adjacent to Capital International Airport. Today, the site is home to a sprawling cargo and logistics center. Last year, Great Ocean sold its 53 percent stake in the project to a Singapore company for nearly $400 million.

That deal and several other investments, in luxury hotels, Beijing villa developments and the Hong Kong-listed BBMG, one of China’s largest building materials companies, have been instrumental to Ms. Duan’s accumulation of riches, according to The Times’s review of corporate records.

The review also showed that over the past decade there have been nearly three dozen individual shareholders of Taihong, many of whom are either relatives of Wen Jiabao or former colleagues of his wife.

The other wealthy entrepreneurs who have worked with the prime minister’s relatives declined to comment for this article. Ms. Duan strongly denied having financial ties to the prime minister or his relatives and said she was only trying to avoid publicity by listing others as owning Ping An shares. “The money I invested in Ping An was completely my own,” said Ms. Duan, who has served as a member of the Ping An board of supervisors. “Everything I did was legal.”

Another wealthy partner of the Wen relatives has been Cheng Yu-tung, who controls the Hong Kong conglomerate New World Development and is one of the richest men in Asia, worth about $15 billion, according to Forbes.

In the 1990s, New World was seeking a foothold in mainland China for a sister company that specializes in high-end retail jewelry. The retail chain, Chow Tai Fook, opened its first store in China in 1998.

Mr. Cheng and his associates invested in a diamond venture backed by the relatives of Mr. Wen and co-invested with them in an array of corporate entities, including Sino-Life, National Trust and Ping An, according to records and interviews with some of those involved. Those investments by Mr. Cheng are now worth at least $5 billion, according to the corporate filings. Chow Tai Fook, the jewelry chain, has also flourished. Today, China accounts for 60 percent of the chain’s $4.2 billion in annual revenue.

Mr. Cheng, 87, could not be reached for comment. Calls to New World Development were not returned.

Fallout for Premier
In the winter of 2007, just before he began his second term as prime minister, Wen Jiabao called for new measures to fight corruption, particularly among high-ranking officials.

“Leaders at all levels of government should take the lead in the antigraft drive,” he told a gathering of high-level party members in Beijing. “They should strictly ensure that their family members, friends and close subordinates do not abuse government influence.”

The speech was consistent with the prime minister’s earlier drive to toughen disclosure rules for public servants, and to require senior officials to reveal their family assets.

Whether Mr. Wen has made such disclosures for his own family is unclear, since the Communist Party does not release such information. Even so, many of the holdings found by The Times would not need to be disclosed under the rules since they are not held in the name of the prime minister’s immediate family — his wife, son and daughter.

Eighty percent of the $2.7 billion in assets identified in The Times’s investigation and verified by the outside auditors were held by, among others, the prime minister’s mother, his younger brother, two brothers-in-law, a sister-in-law, daughter-in-law and the parents of his son’s wife, none of whom is subject to party disclosure rules. The total value of the relatives’ stake in Ping An is based on calculations by The Times that were confirmed by the auditors. The total includes shares held by the relatives that were sold between 2004 and 2006, and the value of the remaining shares in late 2007, the last time the holdings were publicly disclosed.

Legal experts said that determining the precise value of holdings in China could be difficult because there might be undisclosed side agreements about the true beneficiaries.

“Complex corporate structures are not necessarily insidious,” said Curtis J. Milhaupt, a Columbia University Law School professor who has studied China’s corporate group structures. “But in a system like China’s, where corporate ownership and political power are closely intertwined, shell companies magnify questions about who owns what and where the money came from.”

Among the investors in the Wen family ventures are longtime business associates, former colleagues and college classmates, including Yu Jianming, who attended Northwestern with Winston Wen, and Zhang Yuhong, a longtime colleague of Wen Jiahong, the prime minister’s younger brother. The associates did not return telephone calls seeking comment.

Revelations about the Wen family’s wealth could weaken him politically.
Next month, at the 18th Party Congress in Beijing, the Communist Party is expected to announce a new generation of leaders. But the selection process has already been marred by one of the worst political scandals in decades, the downfall of Bo Xilai, the Chongqing party boss, who was vying for a top position.

In Beijing, Wen Jiabao is expected to step down as prime minister in March at the end of his second term. Political analysts say that even after leaving office he could remain a strong backstage political force. But documents showing that his relatives amassed a fortune during his tenure could diminish his standing, the analysts said.

“This will affect whatever residual power Wen has,” said Minxin Pei, an expert on Chinese leadership and a professor of government at Claremont McKenna College in California.

The prime minister’s supporters say he has not personally benefited from his extended family’s business dealings, and may not even be knowledgeable about the extent of them.

Last March, the prime minister hinted that he was at least aware of the persistent rumors about his relatives. During a nationally televised news conference in Beijing, he insisted that he had “never pursued personal gain” in public office.

“I have the courage to face the people and to face history,” he said in an emotional session. “There are people who will appreciate what I have done, but there are also people who will criticize me. Ultimately, history will have the final say.”








Zoom in (real dimensions: 1000 x 667)Image
Wen Jiabao attends a meeting in Beijing.


It was about 5 in the morning in Beijing when the New York Times revealed, in a story posted to its website, that the family of Prime Minister Wen Jiabao has amassed “assets worth at least $2.7 billion.”

Whether deliberate or not, the timing could have been helpful for allowing the story an opportunity to spread in China, going online early enough that censors might not be watching closely but late enough that it might have a chance of making it into web users’ first social media scan of the morning. But the story is a remarkably sensitive one — it contradicts Wen’s image as a more wholesome reformer and comes at a time of political transition, economic slowdown, and rising public resentment of wealthy officials — and the censors moved quickly.

Within a couple of hours, both the New York Times’ English and Mandarin sites were blocked in China. When someone on the BBC mentioned the story, the station’s broadcast immediately went black in China. Discussion on China’s vibrant and fast-moving Twitter-like service, Weibo, seems to have been ground to a halt almost as quickly as it started. The online censorship has been “as fast I’ve seen it,” said Liz Carter, an experienced China-watcher and a contributor to the site Tea Leaf Nation, which analyzes Chinese social media and Chinese web trends. The phrase “New York Times” is blocked as a search term. Wen’s name, as with other top Chinese officials, is typically blocked, including now.

As an indication of how quickly Weibo censors are combing through the site’s constant torrent of discussion to delete any mention of the story, Carter pointed me to a post by Wang Feng, a respected Chinese professor at the prestigious Tsinghua University. ”[For] the original text, see the account of Yong Cai,” Wang posted at 9:18 a.m., Beijing time. Yong is a professor at the University of North Carolina who studies Chinese governance. Carter, watching the Weibo post go up live, clicked over and saw nothing. She clicked back to Wang’s page and saw that Yong had posted a response: “It’s already been harmonized,” meaning deleted.

The timestamp was 9:19 a.m., just one minute after Wang’s post. Carter was able to find some scant mentions of the story, but only very light discussion, much of it focusing on the disruptive censorship itself. “No wonder everything’s been censored,” one commented. Another asked, “Has anyone seen the headline of the New York Times?”

Someone wondered whether $2.7 billion would be enough to place Wen on Forbes magazine’s annual list of international billionaires. (It would, tying him at 442nd with a number of others, including Oprah Winfrey.) That censors have so far been able to tamp down a story with such potential resonance among Chinese web users is striking.
Low-level officials caught flashing far, far less wealth than $2.7 billion have become the victims of populist web campaigns so large and sustained that they have been forced to resign and sometimes even ended up in prison.

”When they want to they can still enforce a pretty clean wipe of social media,” Carter said. That they’ve moved so quickly suggests that Beijing fears the public backlash should the news spread. But how long can they keep down a story this big?








Chinese authorities blocked access to the English and Chinese websites of The New York Times on Friday, October 26, 2012

Hong Kong (CNN) -- Chinese authorities on Friday blocked access inside the country to the English and Chinese websites of The New York Times after they published an article reporting that family members of Premier Wen Jiabao had amassed a fortune worth billions of dollars.

Citing corporate and regulatory records, The Times said it had pieced together evidence showing that Wen's relatives have controlled assets worth at least $2.7 billion, often hiding their names "behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners." China reacted angrily to the report, preventing people inside the country from visiting the two Times websites or searching for the terms "New York Times" and "Wen Jiabao" on popular social media platforms.
Big Brother still watching: Internet censorship on the up

"It's trying to blacken China's image and has ulterior motives," Chinese Foreign Ministry spokesman Hong Lei said in a response to a question about the article, which mentioned Wen's son, daughter, younger brother and brother-in-law as being among those who had grown rich during Wen's time in power. Asked about the decision to block the websites, Hong replied: "China regulates the Internet in accordance with laws and regulations." The Chinese government tries aggressively to control the flow information inside its borders about sensitive topics like unrest in Tibetan areas and criticism of senior officials. It strictly manages the output of domestic news media outlets and has a history of shutting off access to international news websites.

Chinese authorities have blacked out the broadcast signal for international television stations like CNN and the BBC when they have aired sensitive reports about the country. The Times story about Wen's family's wealth comes at a particularly delicate time for the ruling Communist Party, only a matter of weeks before the start of the 18th Party Congress, at which the country's next set of top leaders will be announced. Opinion: New 'democracies' failing if speech isn't free. Authorities have stepped up security in Beijing, where the congress, part of a once-in-a-decade leadership transition, will take place. This transfer of power has already been complicated by the dramatic and damaging scandal involving the former high-flying official Bo Xilai and his inner circle.

In a country where official corruption is widespread, the top leadership is particularly sensitive to suggestions that its members or those close to them have become unusually wealthy. The growing divide between rich and poor after two decades of torrid economic growth has added to that defensiveness. The Times article on the wealth of Wen's relatives comes four months after Bloomberg News reported that the extended family of Vice President Xi Jinping, the presumptive next top leader of China, had accumulated business interests worth hundreds of millions of dollars during his rise up the Communist Party ladder.

Chinese authorities cut off access to the Bloomberg News website following publication of the article, which was also based on public documents. The blocking of the Times websites Friday also takes place four months after the introduction of the Chinese-language site, which the company said at the time was "intended to draw readers from the country's growing middle class" through a mixture of reporting by Chinese journalists and Times articles translated from English. The Times cited a company spokeswoman as expressing disappointment Friday that web access had been cut off.

"We hope that full access is restored shortly, and we will ask the Chinese authorities to ensure that our readers in China can continue to enjoy New York Times journalism," said Eileen Murphy, according to The Times. "We will continue to report and translate stories applying the same journalistic standards that are upheld across The New York Times."

The servers that host both the English and Chinese sites of the Times are outside mainland China, according to the news organization.

MORE STORIES:
:!: Heavy hand of China's censors fuels online frenzy - By Jaime A. FlorCruz, CNN








NEW YORK: The relatives of China's prime minister have invested in assets worth at least US$2.7 billion, according to a New York Times investigation ahead of a pivotal power handover for the Communist Party.
The newspaper said that many relatives of Wen Jiabao, who will be replaced in a once-in-a-decade leadership transition next month, have become "extraordinarily wealthy" during his time in office.

The investments span banks, jewellers, tourist resorts, telecommunications companies and infrastructure projects, with the owners of the assets often concealed by using offshore vehicles or complicated holding structures. The report comes as an embarrassment for Wen, whose public image is of a man of humble origins and a reformer fighting abuses and corruption within the party -- a source of widespread anger among ordinary Chinese.

The New York Times website was quickly blocked by censors in China on Friday morning. The investigation, based on corporate and regulatory records from 1992 to 2012, compiled alleged dealings by Wen's son, daughter, younger brother and brother-in-law, as well as his mother. His mother owned a stake valued at US$120 million in 2007 in the Ping An insurance giant, which benefited from reforms during Wen's tenure, according to the newspaper.

It gave no figure for the family's net worth now, but calculated the value of the assets they had controlled over the period examined. No holdings were found in Wen's name. Speculation of a hidden fortune has been circulating for years, fuelled by US embassy documents from 2007 made public by WikiLeaks that alleged influence-peddling by members of Wen's family.

The business of his wife, Zhang Beili, a well-known jewellery and gemstone expert, had become "an off-the-charts success only as her husband moved into the country's top leadership ranks," The Times said. The investigation comes at a delicate and highly sensitive time ahead of China's power transition starting November 8, when successors to Wen and President Hu Jintao will be revealed.

The lead-up has already been tarnished by the case of disgraced former leader Bo Xilai, who is expected to go on trial after being stripped of his parliamentary seat and legal immunity, according to state media reports Friday. The former party boss from the huge southwestern city of Chongqing, once tipped for a top party role, fell from grace after being linked to the murder of a British businessman. His wife has been convicted of the murder and has been given a suspended death sentence after the city's police chief turned against the couple and detailed their alleged crimes in the US consulate.

In June, an investigation by financial news agency Bloomberg alleged the relatives of the man tipped to be the next Chinese president, Xi Jinping, had also built up a giant portfolio of investments in property and stocks. Public anger about corruption and cronyism is on the rise in China, fanned by social media that helps spread stories of official wrong-doing despite the best efforts of the country's powerful censors.

China's top disciplinary official said earlier this month that the party had placed investigation of graft allegations as "the main priority of our work."

"Corrupt individuals, no matter who they are, will be followed relentlessly and will never escape punishment," He Guoqiang, a member of the nine-man Communist Party committee that runs China, was quoted as saying on October 9.

The state-run magazine China Newsweek reported this month that as many as 18,000 corrupt government officials have fled the country with 800 billion yuan (US$128 billion) since the mid-1990s.

The number of fleeing officials has risen steadily over the past decade from about 600 in 2003 to over 1,600 last year, with a spike in 2007 to 4,500, the magazine said, citing the national public prosecutor's office





China Blocks New York Times Website After Article
by BEIJING October 26, 2012 (AP)


China blocked access to The New York Times website Friday after the paper published a lengthy article claiming the family of Premier Wen Jiabao has amassed assets worth $2.7 billion through a web of investments.

The report said most of Wen's family's wealth was accumulated after he rose to high office in 2002. Chinese censors also blocked the Times' Chinese-language site that carried a translated version of the story. Chinese Foreign Ministry spokesman Hong Lei told reporters at a press briefing that the report "blackens China and has ulterior motives." He refused to elaborate despite several follow-up questions.

Times' spokeswoman Eileen Murphy says the paper hoped access to the sites could be restored shortly. While Wen is expected to leave his post in the spring, the report is a blow to his reputation as a politician concerned with bettering the lives of ordinary Chinese. 
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China Blocks Web Access to Times After Article
by KEITH BRADSHER - Friday, October 26, 2012



Zoom in (real dimensions: 660 x 467)Image
Many relatives of Mr. Wen became wealthy during his leadership



HONG KONG — The Chinese government swiftly blocked access Friday morning to the English-language and Chinese-language Web sites of The New York Times from computers in mainland China 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.

Rebecca MacKinnon, a senior fellow specializing in Internet free expression and privacy issues at the New America Foundation, a nonpartisan group headquartered in Washington, said that the Chinese interruption of Internet access was typical of the response to information that offended leaders. “This is what they do: they get mad, they block you,” she said. The English-language and Chinese-language Web sites of The Times are hosted on servers outside mainland China.

A spokeswoman for The Times, Eileen Murphy, expressed disappointment that Internet access had been blocked and noted that the Chinese-language Web site had attracted “great interest” in China. “We hope that full access is restored shortly, and we will ask the Chinese authorities to ensure that our readers in China can continue to enjoy New York Times journalism,” she said in a statement, adding, “We will continue to report and translate stories applying the same journalistic standards that are upheld across The New York Times.”

Former President Jiang Zemin of China ordered an end to blocking of The New York Times Web site after meeting with journalists from The Times in August 2001. The company’s Web sites, like those of most other foreign media organizations, have remained mostly free of blocking since then, with occasional, temporary exceptions.
By 7 a.m. Friday in China, access to both the English- and Chinese-language Web sites of The Times was blocked from all 31 cities in mainland China tested. The Times had posted the article in English at 4:34 p.m. on Thursday in New York (4:34 a.m. Friday in Beijing), and finished posting the article in Chinese three hours later after the translation of final edits to the English-language version.

Publication of the article about Mr. Wen and his family comes at a delicate time in Chinese politics, during a year in which factional rivalries and the personal lives of Chinese leaders have come into public view to a rare extent and drawn unprecedented international interest. The New York Times is not the first international organization to run into trouble with Chinese censors. Google decided to move its servers for the Chinese market in January 2010, to Hong Kong, a semi-autonomous Chinese territory outside the country’s censorship firewalls, after the company was unable to reach an agreement with the Chinese authorities to allow unrestricted searches of the Internet.
Bloomberg published an article on June 29 describing wealth accumulated by the family of Vice President Xi Jinping, who is expected to become the country’s next top leader as general secretary of the Communist Party during the coming Party Congress.

Since then, Bloomberg’s operations have encountered a series of problems in mainland China, including the blocking of its Web site, which is in English.
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Wen Jiabao, premier for 10 years, is due to step down as part of a leadership transition

China has condemned as a "smear" a New York Times report saying Premier Wen Jiabao's relatives have accumulated billions of dollars. 
The article said Mr Wen's family members "have controlled assets worth at least $2.7bn (£1.7bn)".
A Foreign Ministry spokesman said the report had "ulterior motives".

Both the NYT's Chinese and English sites are being blocked inside China, as are references to the report on micro-blogging sites. "Some reports smear China and have ulterior motives," Foreign Ministry spokesman Hong Lei said when asked about the story in a daily press briefing. On the blocking, he said the internet was managed "in accordance with laws".

Wealth gap
In its report, the New York Times said Mr Wen's relatives' holdings included property, insurance and construction firms.
"Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership," the newspaper wrote.

"In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners."

The family's investments reportedly spanned several sectors. The newspaper cited one holding as Ping An, an insurance company which it said had benefited from reforms enacted in 2004 by a state body over which Mr Wen had oversight.

It said that partnerships controlled by Mr Wen's relatives, along with their friends and colleagues, had bought into the firm before its IPO, or stock market flotation, in 2004, and held as much as $2.2bn in the company in 2007. The newspaper said both the Chinese government and Mr Wen's relatives declined to comment on the investigation, which was based on corporate records from 1992-2012.

No holdings were found in Mr Wen's name, it said, nor was it possible "to determine from the documents whether he recused himself from any decisions that might have affected his relatives' holdings, or whether they received preferential treatment on investments".

China is sensitive about reports on its leaders, particularly when it comes to their wealth. 
A growing wealth gap is causing public discontent, as are the frequent corruption scandals involving government officials.

When, in June 2012, a Bloomberg investigative report examined the finances of the relatives of president-in-waiting Xi Jinping, the company's website was blocked in China - even though the report said there was no indication of wrongdoing by him or his family.

Mr Wen has been the Chinese premier for almost 10 years. He is due to step down in a power transition that begins on 8 November He is seen as a popular figure with the common touch, and is portrayed in state media as a leader with great concern for the lives of ordinary people. A spokeswoman for New York Times said she hoped that full access to the websites would be "restored shortly" in China.

The BBC has also been affected, with the BBC World News channel blocked when a correspondent was asked about the story during a report, and the BBC News website blocked later on Friday. On China's Twitter-like weibo platforms, keywords such as Wen Jiabao and the New York Times are blocked. Mr Wen's name, like most other Chinese leaders, has always been a screened keyword. Some netizens did manage to post the article despite heavy and rapid censorship. A Sina Weibo user tweeted about the article from Kawagoe city in Japan, but his post was removed after 11 minutes.

"The Twist Your Waist Times says the best actor has $2.7bn of assets. I just wonder how will he spend it?" asked a Tencent Weibo user registered in the British West Indies territory of the Turks and Caicos Islands. "Twist your waist" in Chinese characters sounds like New York when spoken, while "best actor" refers to Mr Wen, who critics say only pretends to be a people-first leader

:mrgreen: John Sudworth
BBC News, Shanghai
Often referred to as "Grandpa Wen" by state media, the premier is one of the few senior Chinese politicians with the popular touch, usually the first to appear at the side of victims of earthquakes or other disasters as a kind of consoler-in-chief. But there have long been rumours that his decade in the job has brought more tangible benefits to his immediate family, and now the New York Times has put a figure on it.

The more than $2.7bn in controlled assets reported by the newspaper are held not by the Chinese premier himself, but by his wife, mother, siblings, children, and their in-laws. The figure though may not come as much of a shock to Mr Wen. A WikiLeaks cable dated 2007 quoted a source as saying the premier was "disgusted" by his family's activities.

But whether he disapproves or not, the investigation shows that much of the wealth has been accumulated in areas of the economy over which he has direct authority. Mr Wen is not the only senior leader over whom that kind of suspicion lingers, but given his position, his public standing and his own championing of the anti-corruption cause, the Times report will be seen by the authorities here as highly sensitive and potentially damaging.

Bloomberg's website is still being blocked after it published, back in June, a similar expose of the family wealth of the man tipped to be China's next leader, Xi Jinping. It may be a while before readers in China get to see the New York Times online again.
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by channelnewsasia - 26 October 2012


BEIJING: Chinese censors blocked online searches related to the New York Times as well as the newspaper's websites on Friday after it published an investigation on the wealth of the Chinese premier's family.

Searches for "New York Times" in Chinese and "NYT" were blocked on the popular social networking website Sina Weibo, which is similar to Twitter, with searches returning a message that the result could not be displayed "due to relevant laws".

The New York Times' official accounts on Sina Weibo and a popular rival, Tencent Weibo, had both been deleted on Friday, with attempts to access the accounts returning the message "this user does not exist". Searches for premier "Wen Jiabao" were also blocked on both social networking sites, but the names of top Chinese leaders are generally blocked on such sites.

Both Weibo sites also blocked searches using the name of Wen's wife, Zhang Beili, and his son Wen Yunsong. China's most popular Internet search engine, Baidu, displayed a message saying "some results cannot be displayed" in response to searches for the name of Wen and his family. While China's 538 million Internet users are able to use microblogs to accuse local officials of corruption, posts making reference to China's most powerful politicians are regularly deleted by online censors.

The New York Times launched a Chinese-language website in June, "designed to bring New York Times journalism to China," the company said. The website, and its English equivalent, were inaccessible to ordinary Chinese users on Friday. The New York Times reported that Wen's family had controlled assets worth US$2.7 billion dollars according to company and regulatory filings seen by the newspaper from 1992-2012.

The report comes as an embarrassment for Wen, whose public image is of a man of humble origins and a reformer fighting abuses and corruption within the party -- a source of widespread anger among ordinary Chinese.

MORE STORIES:
:!: China Blocks NY Times Website Over Story on Wen Jiabao





The New York Times' China coup
by Michael Wolff - Saturday, October 27, 2012



Zoom in (real dimensions: 995 x 678)Image


Wen Jiabao's family has accumulated vast wealth during his time as China's premier, the New York Times reported. 

The New York Times' unraveling of the holdings of the Chinese premier, Wen Jiabao, and his family may be its most direct challenge to a sitting government since its publication of the Pentagon Papers in 1971. Arguably, its forensic accounting, will be even much more damaging and potentially transformational to the Chinese government than its seminal revelations about the roots of the war in Vietnam were to the Nixon government.

As with the Pentagon Papers, the Times now faces the concerted wrath of the government it has challenged. The Nixon administration took the Times to the US supreme court, in a move that threatened to criminalize the company. The Chinese government has cordoned off the Times' digital reach into China and, effectively, declared it persona non grata in one of the world's most significant markets. In other words, it's a great day. The Times' story, by David Barboza, is the type of journalism that not only catches the powerful in flagrante delicto, but that revivifies the paper's reason for being.

This has not been a kind few years for the Times, with its management, its journalism, and its prospects, under constant and more often than not unflattering scrutiny.
But a story like this is something of an instant brand turnaround. The New York Times took on China and, in the first round, won. This being China, the Times will, surely, be engaged in a constant battle going forward – even, perhaps, a confrontation that defines the sides in some new international press battle. That will, no doubt, be to its short term economic disadvantage. But that is good news for the Times, too.

Newspapers, beleaguered everywhere by changing distribution and advertising models, can only prove their real worth by showing their unique power. The New York Times just meaningfully altered the future of China. Even if the Chinese can prevent anyone in China from reading the Times story – which they cannot – the rest of the world, from here on in, understands China in a different context. 

China, we now know, is where the relatives of its Communist leaders have accumulated huge hidden riches. 

So it is not just that the Times has delivered a riveting, pull-the-cover-back story of state-sponsored self-enrichment on the grandest scale possible, but it has superbly demonstrated its own function and unique capabilities.

What other news organization could have written this story? The Times released dismal earnings yesterday and its stock dropped by more than 20%. But its real value took an incalculable leap today.





China blocks discussion of report on premier Wen
by channelnewsasia - 27 October 2012



File photo: Chinese Premier Wen Jiabao. (AFP - Mark Ralston) 

BEIJING: China's censors did their best Saturday to block discussion of a New York Times investigation into Premier Wen Jiabao, but analysts said the report would still likely reach tens of millions of people.

Detailing a string of deals on Friday, the newspaper said that relatives of the government's number two -- a self-styled man of the people known popularly as "Grandpa Wen" -- had become "extraordinarily wealthy" during his tenure.

Investments by Wen's son, wife and others spanning the banking, jewellery and telecom sectors were worth at least US$2.7 billion according to an analysis of company and regulatory filings from 1992-2012. State-run newspapers made no mention of the scandal on Saturday, while China's army of censors ensured that searches for The New York Times or other related terms returned no results on social networks and search engines. The English-language and Chinese websites of the American newspaper were also blocked in China and reports on international television channels CNN and BBC World were blacked out.

"Only a small proportion will be aware of the story," seasoned China watcher Willy Lam told AFP. He estimated that about 10 per cent of China's 500-million-strong online population would still manage to evade the censors, however, amounting to about 50 million people. "The NYT story will hurt Wen Jiabao... his reputation will be adversely affected," he explained, adding that many Chinese had become very cynical about the wealth accumulated by those near the centres of power.

"Most Chinese just assume that the top leaders are corrupt," he said. The revelations come as a particular embarrassment for Wen, who is the standard-bearer of the Communist Party's reformist wing and has campaigned against corruption. In a speech published in April, he said official corruption was "the biggest danger facing the ruling party" and warned that "those who hold political power may perish" unless it is addressed. The NYT report coincided with the announcement that former regional Communist Party boss Bo Xilai had been stripped of his parliamentary seat ahead of an expected trial, which was meant to signal a new get-tough approach on graft.

Bo's expulsion from the National People's Congress came after state media announced last month that he would "face justice" for alleged abuse of power, taking bribes and improper sexual relations. The NYT investigation darkens the clouds hanging over the Communist Party caused by the Bo scandal as the regime prepares to name successors to Wen and President Hu Jintao in a once-in-a-decade leadership change starting November 8.

The New York Times said in a blogpost that the investigation into Wen had taken a year and that the newspaper knew of the likely impact on its business prospects in China. It invested in a Chinese-language version of its website only recently and will lose out on advertising revenue if it remains unavailable to the public.

"I'm very proud of this work," New York Times publisher Arthur Sulzberger was quoted as saying in the post. "Our business is to publish great journalism. Does this have a business impact? Of course." In June, business news agency Bloomberg published an investigation into the finances of Vice President Xi Jinping, who is expected to be promoted to president at a Communist Party congress next month. Bloomberg's website is still blocked and Chinese banks were encouraged to stop using financial data provided by the US company.

Beijing on Friday dismissed the NYT report as an attempt to tarnish China, with foreign ministry spokesman Hong Lei telling reporters in response to a question on the article: "Some reports smear China and have ulterior motives."








Mr Wen is portrayed in China as a popular figure with a human touch

Lawyers for Chinese Premier Wen Jiabao's family have rejected New York Times claims that they have amassed "hidden riches" of billions of dollars. In a statement carried by Hong Kong media, they said that while some of the family were involved in business activities none of it was illegal. The US newspaper reported on Friday that Mr Wen's family controlled assets worth at least $2.7bn (£1.7bn).

It responded to the statement on Sunday, saying it stood by the story. China has condemned the report as a smear, and NYT sites are blocked in the country, as are references to the report on micro-blogging sites.

Legal threat
Bai Tao of the Junhe Law Office and Wang Weidong of the Grandall Law Firm released the statement late on Saturday evening responding to the "untrue" New York Times report. "The so-called 'hidden riches' of Wen Jiabao's family members in The New York Times' report does not exist," the statement said. The lawyers also denied that Mr Wen had any role in his family's business activities, nor allowed them to influence policy. It specifically referred to Mr Wen's 90-year-old mother, who it said had no property nor any income apart from her salary and pension.

One of the central claims of the report was that Yang Zhiyun had a $120m investment in Ping An Insurance. The statement ended with an apparent threat of legal action.
"We will continue to make clarifications regarding other untrue reports by the New York Times, and reserve the right to hold it legally responsible," it said. But Times spokeswoman Eileen Murphy expressed confidence in the report. "We are standing by our story, which we are incredibly proud of and which is an example of the quality investigative journalism The Times is known for," she wrote in an email quoted by the newspaper.

Power transition
In its report, the New York Times said Mr Wen's relatives' holdings included property, insurance and construction firms. "In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners," it said. The newspaper said both the Chinese government and Mr Wen's relatives declined to comment on the investigation, which was based on corporate records from 1992-2012.

China is sensitive about reports on its leaders, particularly when it comes to their wealth. A growing wealth gap is causing public discontent, as are the frequent corruption scandals involving government officials. When, in June 2012, a Bloomberg investigative report examined the finances of the relatives of president-in-waiting Xi Jinping, the company's website was blocked in China - even though the report said there was no indication of wrongdoing by him or his family. Mr Wen has been the Chinese premier for almost 10 years. He is due to step down in a power transition that begins on 8 November.

He is seen as a popular figure with the common touch, and is portrayed in state media as a leader with great concern for the lives of ordinary people.
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Wen's family lawyers deny NYT riches claim
by channelnewsasia - 28 October 2012


HONG KONG: Lawyers for relatives of Chinese Premier Wen Jiabao have hit back at an "untrue" New York Times article which alleged the family has accumulated vast wealth, a report said Sunday.

Hong Kong's South China Morning Post, which printed what it said was a statement from the lawyers, said it was the first time the family of a top Chinese leader has issued a rebuttal of a foreign media report. Friday's New York Times (NYT) article came at an especially sensitive time, as the Communist Party strives to clean house before a pivotal handover of power next month. Detailing a string of deals, the NYT said many relatives of the government's number two -- a self-styled man of the people -- had become "extraordinarily wealthy" during his years in office.

Investments by Wen's son, wife and others spanning the banking, jewellery and telecom sectors were worth at least US$2.7 billion according to an analysis of company and regulatory filings from 1992-2012, it said. Wen's 90-year-old mother owned a stake valued at US$120 million in 2007 in the Ping An insurance giant, according to the US newspaper. The allegations come as a particular embarrassment for Wen, who is expected to step down as premier next March. He is the standard-bearer of the party's reformist wing and has campaigned against rampant corruption.

The South China Morning Post reproduced the statement from two lawyers, Bai Tao and Wang Weidong, rejecting aspects of the NYT report. China's foreign ministry has denounced the article as a smear campaign. The lawyers denied that Wen's mother Yang Zhiyun ever held a US$120 million investment in Ping An Insurance. She had "never had other income or property" except for her government salary and pension. "The so-called 'hidden riches' of Wen Jiabao's family members in The New York Times' report does not exist," the statement said.

The lawyers said they would continue to "make clarifications regarding other untrue reports" by the newspaper and reserved the right to hold it "legally responsible". Their statement said Premier Wen "has never played any role in the business activities of his family members" and had not allowed those activities to influence his policies. The lawyers could not be reached by AFP for comment Sunday. The NYT report found no indication Wen had intervened on behalf of family members and said he himself did not appear to have accumulated assets. It did not suggest that any of the family's business activities were illegal.

The NYT said on its website it was standing by the story.

It noted that while the lawyers disputed that Wen's mother had held assets, it did not address the article's calculation that the family had controlled assets worth at least US$2.7 billion.






China Blocks and Criticizes Investigation Into Premier
by KEITH BRADSHER - Saturday, October 27, 2012



HONG KONG — A spokesman for China’s Foreign Ministry on Friday criticized a decision by The New York Times to publish a lengthy investigation into assets accumulated by the family of Prime Minister Wen Jiabao, saying that the article “smears China and has ulterior motives.”

Speaking at a regularly scheduled daily briefing in Beijing, the spokesman, Hong Lei, also said that the Chinese government’s decision to immediately block access to the English- and Chinese-language Web sites of The Times on Friday morning was taken “in accordance with laws and rules.” China’s censors also moved with unusual swiftness on Friday to delete any social media postings alluding even tangentially to the article, which cited publicly available corporate documents in reporting that Mr. Wen’s family has controlled assets worth at least $2.7 billion.

Sina Weibo, a very popular microblogging service similar to Twitter and traded on the Nasdaq in New York, on Friday morning immediately deleted the unofficial account that had been used to promote the culture and arts coverage on the Chinese-language site of The Times and that had nearly 60,000 followers. The site’s official account had been blocked since the site began operations in late June. Even the term “$2.7 billion” was blocked on Friday on Weibo. But users were still discussing the article by using deliberate mistakes like “2.7b.”

Despite the censorship, there were signs that the article was attracting attention. According to the company’s statistics, the number of page views and unique users of the Chinese-language site fell by only a third on Friday compared with the previous Friday, even though 85 percent of users are typically located in mainland China. The investigative article was the site’s most popular, drawing nearly a third of page views, while the home page drew another third. The continued strength of traffic to the site was a sign that many users were using virtual private networks, or V.P.N.’s, to effectively bypass servers in China and circumvent the country’s censors. “We are incredibly proud of the story, which is an example of the quality investigative journalism The Times is known for,” Eileen Murphy, a company spokeswoman, said in an e-mail, later adding that the company remains very focused on global expansion and that “we see great opportunity in China as we do in other countries around the world with growing economies and a citizenship interested in quality journalism about global affairs.”

There were many comments about the article on social media sites outside China, including some suggesting that such a detailed and comprehensive look at a leading family’s finances in a secretive country like China could have been possible only as a result of a deliberate leak by one of Mr. Wen’s rivals in the country’s factional power struggles. Those struggles appear to have become more fierce in recent months ahead of the Communist Party Congress, which is scheduled to start on Nov. 8 and is expected to produce a new slate of leaders to run China for the next 10 years.

But the reporter who wrote the article, David Barboza, said that he had begun gathering corporate records for the investigation late last year. “Thirty years of economic reform — and government policies aimed at attracting foreign investment — have created a set of government agencies that keep records on private corporations and their major shareholders, including copies of résumés and government-issued identity cards,” he said. While China has started restricting access this year to some of these documents in Beijing, they were previously publicly available, and Mr. Barboza said that he had gathered many of them before the restrictions were put in place.
He also found that documents still remained available in Tianjin — Mr. Wen’s hometown — as well as in Shanghai, Shenzhen and other cities.








Lawyers for Chinese Premier Wen Jiabao’s relatives have threatened to ”hold responsible” the New York Times for its report claiming that the family held assets worth $2.7 billion. The lawyers’ statement said the “hidden riches” didn’t exist.

Lawyers for relatives of Chinese Premier Wen Jiabao have hit back at an "untrue" New York Times article which alleged the family has accumulated vast wealth, a report said Sunday. Hong Kong's South China Morning Post, which printed what it said was a statement from the lawyers, said it was the first time the family of a top Chinese leader has issued a rebuttal of a foreign media report. Friday's New York Times (NYT) article came at an especially sensitive time, as the Communist Party strives to clean house before a pivotal handover of power next month.

Detailing a string of deals, the NYT said many relatives of the government's number two -- a self-styled man of the people -- had become "extraordinarily wealthy" during his years in office. Investments by Wen's son, wife and others spanning the banking, jewellery and telecom sectors were worth at least $2.7 billion according to an analysis of company and regulatory filings from 1992-2012, it said. Wen's 90-year-old mother owned a stake valued at $120 million in 2007 in the Ping An insurance giant, according to the US newspaper.

The allegations come as a particular embarrassment for Wen, who is expected to step down as premier next March. He is the standard-bearer of the party's reformist wing and has campaigned against rampant corruption. The South China Morning Post reproduced the statement from two lawyers, Bai Tao and Wang Weidong, rejecting aspects of the NYT report. China's foreign ministry has denounced the article as a smear campaign. The lawyers denied that Wen's mother Yang Zhiyun ever held a US$120 million investment in Ping An Insurance. She had "never had other income or property" except for her government salary and pension.

"The so-called 'hidden riches' of Wen Jiabao's family members in The New York Times' report does not exist," the statement said. The lawyers said they would continue to "make clarifications regarding other untrue reports" by the newspaper and reserved the right to hold it "legally responsible". Their statement said Premier Wen "has never played any role in the business activities of his family members" and had not allowed those activities to influence his policies. The lawyers could not be reached by AFP for comment Sunday. The NYT report found no indication Wen had intervened on behalf of family members and said he himself did not appear to have accumulated assets. It did not suggest that any of the family's business activities were illegal. The NYT said on its website it was standing by the story.

It noted that while the lawyers disputed that Wen's mother had held assets, it did not address the article's calculation that the family had controlled assets worth at least $2.7 billion.