Chinese Law Prof Blog

Editor: Donald C. Clarke
George Washington University Law School

Saturday, October 27, 2012

The Wen family fortune and the denial

Lawyers purporting to speak on behalf of the family of Wen Jiabao (and I have no reason to doubt that they do) have issued a statement challenging certain aspects of the blockbuster expose recently published in the New York Times [English|Chinese]. Although the headline of the Times's report on the statement is "Chinese Premier’s Family Disputes Article on Riches," in fact the statement disputes remarkably little.

Let's look at what it says:

I. The so-called “hidden riches” of Wen Jiabao’s family members in the New York Times’ report does not exist.

This is way too vague to constitute a denial of anything.

II. Some of Wen Jiabao’s family members have not engaged in business activities. Some were engaged in business activities, but they did not carry out any illegal business activity. They do not hold shares of any companies.

(1) Well, of course some of Wen's family members have not engaged in business. The Times did not claim they all had. Thus, no dispute. (2) The Times article did not claim anyone had done anything illegal. Again, nothing to dispute. (3) Are they saying that no members of Wen's immediate family hold any shares in any companies? There is of course nothing wrong with anyone owning stock in some company. This part of the statement is, however, a genuine dispute, since the article does assert that "Mr. Wen’s relatives accumulated shares in banks, jewelers, tourist resorts, telecommunications companies and infrastructure projects". Maybe there is some "it depends on what the meaning of 'is' is" going on around the difference between "relatives" and "family members". But it would be hard to claim that his mother is not a family member, and the article did assert that she owns shares. OK, one genuine dispute here.

III. The mother of Wen Jiabao, except receiving salary/pension according to the regulation, has never had any income or property.

Another genuine dispute. This flatly contradicts what the article asserts.

IV. Wen Jiabao has never played any role in the business activities of his family members, still less has he allowed his family members’ business activities to have any influence on his formulation and execution of policies.

No dispute here; the article does not make this claim.

V. Other relatives of Wen Jiabao and the “friends” and “colleagues” of those relative are responsible for all their own business activities.

This is almost true by definition. Again, it doesn't contradict anything the article says.

All in all, then, the lawyers' statement really challenges only one specific assertion - that Wen's mother is a multi-millionaire - and one general assertion - that several of his relatives own shares in various corporations. It may be that in many cases it is literally true that the relatives don't own shares in companies; instead, they may hold interests in partnerships or some other entity that doesn't have shares, and the entities in turn hold the corporate shares. But I wonder whether you can go through life as a wealthy person and not own any shares in any companies.

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If the Times agree that "Other relatives of Wen Jiabao and the “friends” and “colleagues” of those relative are responsible for all their own business activities", then why would the Times publish this report? Yes the Times did not say directly Wen had any wrong doing, but the whole point of this "blockbuster expose" is that all the riches of the relatives and colleagues are related to Wen. It's very disingenuous for Times to deny that it did not implicate Wen.

Posted by: anon | Oct 27, 2012 11:04:18 PM

The assertion is that "They do not hold shares of any companies," present tense, so this could be literally true.

The Times also asserts, "Cor­po­rate reg­is­tra­tion records re­viewed by The Times showed that in 2007 the prime min­is­ter’s 90-year-old moth­er held about $120 mil­lion worth of shares in Ping An, an in­sur­ance com­pa­ny, through in­vest­ment ve­hi­cles. A sig­na­ture bear­ing her name and her gov­ern­ment-is­sued iden­ti­ty card were in­cluded in the reg­is­tra­tion record, which was ob­tained from gov­ern­ment reg­u­la­tory fil­ings." So owning shares in the past though partnership, nominees, or other obscuring entities in at least this case wasn't the case.

Posted by: Richard Hintz | Oct 28, 2012 7:43:57 AM

The Chinese Communist Party has rules and regulations that prohibit close family members (spouse and children) of the high-rank officials from doing any business in the regions under their administration. It is illegal for the close family members of Wen, China's premier, to do business in China. Thus, although they did not engage in illegal business, it is illegal for them to do business. Otherwise they should resign and be published by the party discipline. Wen's son Yunsong Wen (Winston Wen) started the New Horizon Capital in 2005 and it has become the No.1 private investment fund in China. Here is the Chinese version of the Rules and Regulations for the Leading Cadres of the Chinese Communist Party:

Posted by: Hello | Oct 28, 2012 2:46:00 PM

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