Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Report Outs China Elite's Offshore Banking Accounts

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Report Outs China Elite's Offshore Banking Accounts

Article excerpt

BEIJING -- This was supposed to be the week the ruling Chinese Communist Party crushed a nascent popular movement that has pressed for fuller disclosure of the hidden wealth of party leaders.

The crackdown wasn't very well-timed. As Chinese authorities were launching the closed trial of a prominent leader of the New Citizens Movement, a group of international journalists released investigative reports detailing how many Chinese leaders and their families have hidden some of their vast wealth in the British Virgin Islands and other places offshore.

The reports, compiled by the International Consortium of Investigative Journalists, reveal a greater scope of offshoring by China's political elite than had previously been reported. Having spent six months poring over a cache of 2.5 million leaked files, the consortium found that 22,000 Chinese had taken advantage of offshore tax havens. Among those were Deng Jiagui, brother-in-law of Xi Jinping, China's president and Communist Party chairman; Wen Yunsong, the son of former Premier Wen Jiabao; and Li Xiaolin, the daughter of former Premier Li Peng.

"Chinese officials aren't required to disclose their assets publicly, and until now, citizens have remained largely in the dark about the parallel economy that can allow the powerful and well- connected to avoid taxes and keep their dealings secret," said the report, a project of the Center for Public Integrity. "By some estimates, between $1 trillion and $4 trillion in untraced assets have left the country since 2000."

Previous reports by The New York Times and Bloomberg News have opened a window into the riches and lifestyles of Chinese leaders and their families, often referred to as "princelings" in Beijing. China's use of tax havens for various financial transactions has long been tracked or reported on by the International Monetary Fund and other groups.

But the investigative journalists' reports add to the revelations by offering insight into the illicit use of tax havens by the Chinese elite, said Brian LeBlanc, an economist at Global Financial Integrity, a Washington organization that tracks transfers of wealth from developed and developing countries. …

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