A confidential January 2007 Henderson memo obtained by The Washington Post lays bare the property developer’s calculations, describing the two organizations as “a bridge for our company to link up with the State Administration of Foreign Exchange. They claim to have intimate connections with high levels at SAFE, and have certain influence.”
The principal span of this “bridge” was Shenzhen Zhaotian Investments, a China-registered private company headed by Tian Chenggang, the son of a former member of the Communist Party’s supreme decision-making body, the Politburo Standing Committee. A second connection was provided by the Strait Peaceful Reunification Foundation, a Hong Kong group with close ties to the brother of another former Standing Committee member.
What the two outfits did exactly is unclear, but Henderson ended up facing only a modest fine.
The episode, detailed in documents relating to a recent Hong Kong court case triggered by a dispute over consulting fees, illuminates a small corner of a booming but almost entirely hidden Chinese industry: influence peddling by members of Communist Party aristocracy. The children and other relatives of party barons, known as princelings, dominate the market in high-level connections, a valuable commodity in a country where the will of the party often trumps the rule of law.
The role — and riches — of China’s princelings has become a particularly touchy issue in the run-up to a party congress this fall that is expected to elevate Vice President Xi Jinping, the son of a Mao-era revolutionary hero, to the summit of power in Beijing.
Xi’s family has not been linked to any evidence of trading influence for cash, but the recent purge of Chongqing party chief Bo Xilai, another prominent princeling, has focused attention on the lavish lifestyles and often mysterious wealth of senior ruling-party families.
In recent weeks, pictures of Bo’s son Guagua have been plastered across the Internet, showing the Harvard student cavorting at bacchanalian parties. (Xi’s daughter also studies at the school but keeps a lower, more button-down profile.)
Bo’s wife, Gu Kailai — a lawyer and the daughter of an early People’s Liberation Army general — is now in detention and under investigation in the death of British business consultant Neil Heywood, an estranged Bo family friend and onetime business adviser. Gu used to run a consulting business, assisting foreign companies trying to find their way in China. Bo’s wife and her sister, along with Bo’s brother, a businessman in Beijing, have stakes in a string of ventures in China and abroad.