The Times's Shanghai bureau chief, David Barboza, reported last week that close relatives of Wen Jiabao, the prime minister of China, hold billions of dollars in hidden riches. Here are his answers to questions from readers prompted by the article.
As the NY Times's Shanghai bureau chief, I assume you are a China old hand. I'm curious about what prompted you to write this article? What was your rationale for the timing of this article? Have you ever got a feeling of being used? - Casablanca
I have been in China since 2004, and as a correspondent for the Business section, I have focused my reporting energies on economic, financial and business issues. Throughout my tenure in China there has been a lot of discussion about whether the families of high-ranking government officials have benefited from the country's economic transformation by receiving so-called secret shares in corporations. This is a regul ar topic of dinner conversation when bankers, lawyers and accountants gather in Shanghai and Beijing. I had been told many times that this is typically done by using “nominee investors,†friends or people not easily identifiable in the shareholder records as having ties to politicians. These nominees, I was told, often hold shares for the relatives of powerful politicians, giving them a stake in a company.
About a year ago, as I was reporting a series of articles about China's state-managed economy, I decided to see if there was any evidence behind the theory. I started looking into the business ties of several high-ranking leaders. Anyone who knows business and finance in China knows that the conjecture about the prime minister's relatives was particularly persistent, so my focus eventually narrowed on the Wen family. I knew this would be a time-consuming and difficult task, but I was determined to answer this question. I plowed in, and to my great surprise found that there was a tremendous amount of information available in the public record. My reporting did not find illegality or corruption. It did reveal the names of Mr. Wen's relatives hidden behind dozens of investment vehicles that few people had ever heard of.
I almost believed all the allegations against Wen in your article (most of the report pointing him as double-handed and heavily involved in the alleged corruptions) until the end of your report, which indicates that he almost divorced his wife because of her questionable business deals, and he was willing to let history judge him. Unfortunately, most people would not finish reading such a lengthy report, or their opinions have been formed based on the first half of your report…. Please enlighten me and other readers how you can justify your strong allegations first and then hinting you may not be sure of the allegations. Let me be clear: We are all fed up with corruptions in China (and elsewhere), but I am afraid your report may cause confusions to the readers, and leading to much tighter government control â€" meaning more corruptions and left-leaning policies in China in the future. Hope that is not what you are wishing for. - Pacific, USA
I have to disagree with your assertion that I first listed strong allegations and then suggested I wasn't sure about the allegations.
My goal in undertaking this story was to determine whether the relatives of the prime minister had large stakes in Chinese companies, and to figure out how much wealth they had accumulated. If there were clues as to how these relatives made their fortunes, that would obviously tell us something about how things work in China for the relatives of senior leaders.
I didn't make allegations, I described my findings: the relatives of the prime minister have controlled a fortune that has had a value of at least $2 .7 billion over the last decade, according to the public records I reviewed.
As with all reporting on any given subject, we did not conduct our investigation in a vacuum. We went directly to the people whose names appeared on the documents we tracked. We made repeated efforts to reach the prime minister and his various relatives to give them the opportunity to discuss the documents or to refute our findings. They did not respond or declined to comment. So the next best option was to explore the public record and share with our readers what the prime minister has said publicly about corruption and whether he has sought personal gain. We also cited documents released by the WikiLeaks organization because they also shed light on the subject and might help the reader better understand the context of our findings. There was an interesting State Department cable from 2007, which refers to the prime minister and his family's business dealings.
I have a strange feeling that New York Times has become a tool in a factional struggle between different factions of Communist party. Your article is not exactly surprising, it's an open secret that nobody's hand was clean in China's leadership. The whole government was corrupt. It's impossible to be an honest government official. Only thing surprising is the scale of corruption, I was thinking hundreds of millions before, thanks to NY Times, now I know it's in billions. - Jordan, Bend, Ore.
My apologies. I have to confess that I'm a business correspondent and do not cover Beijing politics, nor was the Party Congress a focus of my investigation. So I can't really tell you the political implications of this article. You may have seen a comment in the article from Minxin Pei, who is at Claremont McKenna College. He believes this will weaken Wen in the last months of his term. There are two other experts who specialize in this area - Li Cheng and Kenneth Lieberthal, both at the Brookings Institution in Washington. We may be hearing more from them in the coming weeks about the 18th Party Congress and the transition, which will involve naming the next president, widely expected to be Xi Jinping, and a new prime minister to replace Wen Jiabao, likely to be Li Keqiang. My colleagues in Beijing are in the midst of a fascinating series about that transition called “Changing of the Guard.â€
It is interesting that a few days ago, several Chinese sites reported that a thick bundle of material about Wen's family wealth was sent to major US news agent by unidentified parties. The speculation was that this was the revenge for people who are sympathetic to Bo Xilai. Could Times tell us why it decided to do this now to Wen even though rumor about it had been going for years. Has the intentional leak played any role in the timing? If yes, I think that Times should mention it. This is a tremendous reporting, but it would be useful for the readers to know the context of this report. We would actually learn more about intricates about Chinese politics. â€"Joy, Poughkeepsie
Your questions are excellent. Why now? Because it took that long to gather and evaluate the evidence, which involved thousands of pages of corporate and regulatory documents that we obtained through public record requests to various government entities in China.
I began looking into the business dealings of Wen Jiabao's family late last year. I had been working on a series called “Endangered Dragon,†which looked at China's government-managed economy, and wanted to include a piece that would give deeper insight into how China's capitalism worked at the top. It is a broad subject, which I decided would be made more manageable by focusing on one family. I chose the prime minister's family because I had heard conjecture about their business dealings for many years. People talked openly about the family's wealth as if it was fact, but there was really no reporting on the subject that I could find that cited hard evidence backing up the claims. I kept scratching my head about why no one had tried to truth-squad the widespread rumors.
So I got started last year, and within a month or so, I was discovering intriguing things about some of the businesses, but each new discovery required digging deeper and deeper. I expected to finish the project within a month, by working weekends, but it took more than a year!
I have read the speculation tha t some “insider†gave me information, or that some enemies of the prime minister dropped off a huge box of documents at my office. That never happened. Not only were there no leaked documents, I never in the course of reporting met anyone who offered or hinted that they had documents related to the family holdings. This was a paper trail of publicly available documents that I followed with my own reporting, and if I might hazard a guess, it was a trail that no one else had followed before me.
In short, given the amount of effort this investigation required, I'd be stunned if there were a box of documents sitting somewhere that contained all of this work. If only it were so easy!
A great article with a lot of details. May I ask you how you can get into such detailed level of information? Did you get any leads from someone inside the Wall? It seems to me it is almost impossible to untangle such a network of secret dealings without any hint from the people in the know, and these are probably people who are Wen's enemies. Thank you. - Jack, NY
My only real source for this lengthy article was a filing cabinet full of documents I requested from various Chinese government offices over a period of about a year. After having some luck with my initial requests for corporate registration documents from the State Administration for Industry and Commerce bureaus, I went on a reporting spree: requesting and paying fees for the records of dozens of investment partnerships tied to the relatives of Wen Jiabao.
I also began making lists of individuals and companies and trying to figure out who the people were and what their relationships were to one another; and what, I asked, was the purpose of all these partnerships - many of which had similar shareholders lists.
Although S.A.I.C. records are open to the public, few journalists in China have really made good use of the m. They are invaluable sources of information about private companies. Two excellent Chinese publications, Caixin and the 21 Century Business Herald, have regularly used S.A.I.C. records. These two publications have done some groundbreaking business reporting here. But government restrictions on writing about the families of senior leaders limits the scope of investigative journalism in China, particularly when the families of high-ranking officials are involved.
So, Jack, there was no person “inside the Wall†helping me. I read the documents, called lawyers, accountants and financial experts for advice about how to make sense of the records. Occasionally I met someone who was able to identify one of the shareholders. But I told very few people that I was working on a story about the prime minister's relatives. Even my closest friends did not know. I knew talking about my research could be risky, and might derail the project.
