Chinese Government Lashes Out at US Newspaper Allegations Surrounding Win Jiabao

Chinese Premier Win Jiabao expressing his worries about the United States economic crisis and the ability of the imperialist state to make good on its treauries being held by the PRC., a photo by Pan-African News Wire File Photos on Flickr.

Wen Jiabao's £1.68bn family wealth: China furious at US exposé

New York Times website blocked after disclosing web of assets in new embarrassment for Communist party

Tania Branigan in Beijing
The Guardian, Friday 26 October 2012 17.00 EDT

China has lashed out at a US newspaper report that premier Wen Jiabao's family has amassed vast wealth worth at least $2.7bn (£1.68bn), censoring the New York Times website and questioning the paper's motivations.

The story said Wen, widely seen as the humane face of China's top leadership, was not directly linked to the holdings. But the association with such a fortune was in stark contrast to the man-of-the-people image he has cultivated.

A foreign ministry spokesman said the report "blackens China's name and has ulterior motives". Censors blocked the paper's Chinese language website, at least partially obstructed access to its main site, and banned microblog searches for New York Times in English and Chinese.

"China manages the internet in accordance with laws and rules," spokesman Hong Lei told reporters when asked why the sites were inaccessible.

The detailed account, based on company and regulatory filings, said several of Wen's relatives had become extremely wealthy since his ascent to the top leadership, controlling assets whose total worth is more than the GDP of Burundi. In many cases their holdings were obscured by layers of partnerships and investment vehicles involving friends, colleagues or business partners.

The report is damaging not only to Wen, but also to the Communist party. It has faced months of unwelcome scrutiny while preparing for a once-in-a-decade leadership transition – mostly thanks to the scandal surrounding disgraced leader Bo Xilai and his wife Gu Kailai's conviction for murdering a British businessman. On Friday Bo was expelled from the country's legislature, as expected, paving the way for his prosecution. He has been accused of corruption and abuse of power.

There has been a spate of revelations about wealth amassed by people around other senior figures. Authorities blocked the Bloomberg website earlier this year after it exposed the multi-million dollar assets held by the extended family of Xi Jinping, heir-apparent to the presidency. It has also reported that Bo's relatives accumulated at least $136m in assets.

The top leaders "are like paranoid, flying eagles," said Edward Friedman, professor of political science at the University of Wisconsin-Madison. "If you are looking up they look like the most powerful creatures in the world. But what they see is what a long fall it would be. I think in their consciousness it is very much about all the things that could go wrong."

He added that, at least among politically-conscious people in urban areas of China, there seemed to have been a tremendous shift in mood since 2008, with patriotic pride and suspicion about the west giving way to a growing sense that the regime does not care about them.

Steve Tsang, an expert on Chinese politics at the University of Nottingham, said of the US report: "It's the kind of story where the leadership is united."Wen is implicated, Bo down … Who's next? Part of the arrangement is that someone leaving power is still protected after he leaves office, so that the system will continue."

Given the bad blood known to exist between Wen and Bo, many anticipate supporters of the latter will seize on the report with glee. Others wonder if it may reduce Wen's future influence. Although he is due to retire as premier, former leaders still play a significant role in the party's decision-making.

Many people – particularly among the elite – had been aware of rumours about Wen's relatives. But the scale of the reported assets is striking and the timing highly sensitive.

While one Sina Weibo user described the report as a shock, another wrote: "Looking at the numbers, I think it is still conservative."

Both remarks were swiftly deleted, as were other references to the New York Times story. A BBC News report on the piece was also blocked in Beijing. Censorship means many in China will remain unaware of the US account.

Wen has repeatedly urged China's leaders to ensure their families and associates do not abuse government influence, and pushed for officials to disclose the assets of their immediate families. Declarations are not public and the New York Times said four-fifths of the assets it found were held by relatives not covered by party rules, including his mother and various in-laws.

A former government colleague of Wen, speaking anonymously, told the New York Times: "In the senior leadership, there's no family that doesn't have these problems … His enemies are intentionally trying to smear him by letting this leak out."

A US diplomatic cable obtained by Wikileaks, dating from 2007, quoted an executive in Shanghai as saying: "Wen is disgusted with his family's activities, but is either unable or unwilling to curtail them."

In March, the premier made an emotional defence of his tenure during his annual press conference, saying history would have the final say and stressing that he had never pursued personal gain.

Substantial holdings in the name of Wen's mother and other relatives were held via an investment vehicle run by a wealthy businesswoman close to Wen's wife, Zhang Beili. Duan Weihong told the New York Times the investments were her own. She sought a low profile so had asked relatives to find others to hold the shares on her behalf. They had "by accident" chosen the premier's relatives.

Zhang Beili, who is rarely seen with her husband, works in the diamond trade. Their son Winston Wen runs New Horizon Capital, one of China's biggest private equity funds.

His wife Yang Xiaomeng told the New York Times: "Everything that has been written about him has been wrong. He's really not doing that much business any more."

The Times said members of Wen's family declined to comment or did not respond.

Separately, the Brookings Institution said the brother of the man expected to replace Wen – vice premier Li Keqiang – should be moved from his senior post at China's state-owned tobacco monopoly. Li oversees public health as part of his duties.

His younger brother, Li Keming, is deputy director of the tobacco body and Cheng Li, author of the Brookings report, suggested his role might have set back attempts to curb tobacco use in China.