A newly-published report by the International Consortium of Investigative Journalists reveals some 22,000 clients from mainland China and Hong Kong who are stashing their money away in offshore acounts in the British Virgin Islands and other locales. The clients include family members of many preeminent CCP elites, including Xi Jinping and Wen Jiabao.
Many of the holdings are managed by top international banks, including UBS, Credit Suisse, and Deutsche Bank, which have topnotch reputations for secrecy. These banks acted as middlemen for Chinese clients to establish trusts and companies in the British Virgin Islands, Samoa, and other islands whose primary reason for existence is the hiding of wealthy people’s funds.
There are some big, big names involved in this case, as the ICIJ reports:
The confidential files include details of a real estate company co-owned by current President Xi Jinping’s brother-in-law and British Virgin Islands companies set up by former Premier Wen Jiabao’s son and also by his son-in-law. […]
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. By some estimates, between $1 trillion and $4 trillion in untraced assets have left the country since 2000. […]
The ICIJ team spent months sifting through the files and the leaked lists of offshore users. In most cases, names were registered in Romanized form, not Chinese characters, making matching extremely difficult. Many offshore users had provided a passport as well as an address when they set up their companies, which made it possible to confirm identities in many but not all cases. Some suspected princelings and officials in the files could not be confirmed and have not been included in this story. […]
The records also include incorporations by relatives of Deng Xiaoping, former Premier Li Peng, and former President Hu Jintao.
When the elite start piling up their funds in offshore accounts and getting-the-hell away from the yuan, it doesn’t exactly show a lot of confidence in their country’s economic and monetary stability.
The report is still fresh off the presses, and there will surely be a lot of analysis in the days to come, but from the looks of things, this could be the most signficiant exposé of China’s elite in a long time.
The graphic below, by the ICIJ (and worth checking out on their website, where it’s interactive), gives a sampling of the kind of people we’re looking at here: