Photo: Feng Li / Getty
Ousted Chongqing boss Bo Xilai’s wife may be suspected of the murder of British businessman Neil Heywood, but there’s another huge crime Bo’s family committed:Being incredibly wealthy.
Yes, Bo — a neo-Maoist, remember — only had an official salary of less than $20,000 and the family’s money was subject to strict export controls.. Yet his son attended the best schools in the world (and drives some sort of luxury car), the family had lavish apartments in London, and there are reports that their total wealth was in the realm of $136 million.
Bo is not alone in this fabulous wealth. He’s a member of a elite known as “princelings”, the sons and daughters of Communist Party officials who enjoy ridiculous status in China. A Bloomberg story about the family wealth of princeling Xi Jinping, the man thought to be the next Chinese President, found that his relatives had their own fabulous wealth (within a few hours Bloomberg.com was blocked in China).
The wealth of the princelings has sparked a fierce internal and external debate about the depths of corruption in China.
So how do they do it? The Financial Times has an excellent story about the wealth of princeling’s like Bo that gives an insight into how they got rich.
“The longer you stay in China the more you realise that everything is controlled by a couple of hundred powerful families,” says one veteran foreign diplomat told the FT. “You also realise that most major foreign companies are trying to hire the sons and daughters of Chinese officials so they can get access and do business.”
Chief executives of three multinationals of three companies told the FT that hiring the princeling’s relatives was “vital” in some industries. They are generally taken on in one of two ways:
- They become partners in “joint ventures through a holding company in Hong Kong or the Caribbean, where Chinese anti-corruption investigators cannot find them”.
- They become highly paid “consultants”, who are “paid in places such as Dubai or Hong Kong, and agreements are frequently written on red paper because photocopies or scans show up black, making it harder for them to be circulated widely.”
The sources add that its difficult to actually get a princeling on board for deals these days, as they’ve all started their own businesses or gone into “private equity”.
The FT also has a great infographic on the site that gives you an understanding of how the princeling’s family ties have led to money.
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