Teaching Comparative Government and Politics

Thursday, June 19, 2014

Anti-corruption beginning at the top

It appears that Chinese President Xi Jinping is trying to demonstrate that cleaning up corruption can begin with his own family.

As China’s Leader Fights Graft, His Relatives Shed Assets

President Xi

As President Xi Jinping of China prepares to tackle what may be the biggest cases of official corruption in more than six decades of Communist Party rule, new evidence suggests that he has been pushing his own family to sell hundreds of millions of dollars in investments, reducing his own political vulnerability.

In January of last year, just after Mr. Xi took power, his older sister and brother-in-law finalized the sale of their 50 percent stake in a Beijing investment company they had set up in partnership with a state-owned bank…

From 2012 until this year, Mr. Xi’s sister… and brother-in-law… sold investments in at least 10 companies, mostly focused on mining and real estate. In all, the companies the couple sold, liquidated or, in one case, transferred to a close business associate, are worth hundreds of millions of dollars…

No investment stakes have been tied directly to Mr. Xi or his wife and daughter. But the extensive business activities of his sister and brother-in-law are part of a widespread pattern among relatives of the Politburo elite, who have built up considerable fortunes by trading on their family’s political standing…

The elite ruling families of China have accumulated billions of dollars in assets, including company shares and real estate, in the past decade as China’s economy has boomed. Many of the investments are in areas such as mining, infrastructure and property that involve the privatization of formerly state-owned assets…

That accumulation of wealth has led to calls for officials to disclose their assets amid surging income inequality that is among the highest in the world and far greater than in Japan, South Korea and Taiwan: neighbors that, unlike China, do not have Communist roots…