Story of Chinese Premier Wen Jiabao’s Wealth Challenges Popular Image

The People’s Republic of China blocked access to The New York Times website on Friday after it posted an investigative piece claiming that the family of Premier Wen Jiabao had amassed some $2.7 billion through a series of investments made after Wen came to power in 2002.

The claims challenge the popular image of the humble official known by many Chinese as “Grandpa Wen”.

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Marco Werman: I’m Marco Werman. This is The World. One of the things about digital journalism is that everyone around the planet can now see your local newspaper. But if that newspaper happens to be The New York Times and it’s got an article about the mind-boggling wealth of the Chinese premier, well, you can bet not everyone in China’s going to see that article. And that’s precisely what has happened. The Times published a lengthy article today about Chinese Premier Wen Jiabao. It claims that over the years Wen’s family has amassed a fortune worth some $2.7 billion, mostly during Wen’s time in office. Chinese censors clearly did not like that, and access to The Times’ web sites, both their English and Chinese versions, was quickly blocked. A foreign ministry spokesperson in Beijing said the article was motivated by ulterior motives. The World’s Mary Kay Magistad is in Beijing. $2.7 billion worth of assets is thought to be controlled by relatives of the Premier, Mary Kay. That’s pretty astounding for a man who projects a humble image.

Mary Kay Magistad: Well, it certainly is and it will be interesting to see how the news is received here once it sort of trickles in to the media-savvy masses. For now the Chinese government is blocking everything it can. The New York Times web page, every time the story comes up on the BBC or CNN the screen goes blank. But this is coming at a very interesting time in many ways. There’s a leadership transition coming up in November. Wen Jiabao is very concerned about his own personal legacy and how people will remember him. The outgoing administration is worried about how people will remember them. And the credibility of the party is at stake.

Werman: Is there any sense, Mary Kay, of how many Chinese saw the New York Times article before the government blocked access to it on the net? And how would they react to the news that the family of the Premier has accumulated all this wealth?

Magistad: Okay, so the story broke in China at about four in the morning in English. There’s also a new Chinese language version of The New York Times, and the Chinese language version of the story came online I believe at about 7, and was online for less than an hour before it was blocked. So people who would have seen the story directly on the New York Times website, the number’s probably pretty small. There’s also a .pdf option available on The New York Times website, so it could be that some people downloaded the story and are passing it around now. There have been a few comments that made it onto the Chinese version of Twitter, Weibo, for a few minutes before they were taken down. But these were posted by Chinese who were outside of mainland China. But what’s kind of interesting is, just with a couple of Chinese friends I’ve talked to, there’s this level of cynicism which I’ve noticed in many people here, you know, we all knew this. All these guys, their families are wealthy. We knew that Wen Jiabao’s wife was many years ago involved in gem trading and diamond trading and he was reportedly embarrassed enough about it that at one point he threatened to divorce her. And he himself has talked many times about how officials need to rein in their families, and not let their families take advantage of the fact that their relative is in a position of power. But it really begs the question then of why he didn’t do a better job of that himself.

Werman: So I kind of offered earlier that Wen Jiabao has projected a humble image, but tweak that for us. What kind of image precisely has he created for himself?

Magistad: Wen Jiabao’s nickname is Grandpa Wen. He’s known for flying out immediately when there’s a disaster, or when people are suffering, when people are stranded at a train station in a snowstorm, and saying I feel your pain, I’m here with you, I’m going to stand here while the rescuers are getting the kid out of the home that collapsed in an earthquake. I’m going to huddle here with you in the train station while you are waiting for the trains that aren’t going because of the snowstorm. And a lot of people really genuinely like him, they like what they’ve seen of him because he’s one of the only Communist Party officials that comes across as really having a personality and compassion. And when you have a situation where the gap between the rich and the poor is growing, where the 70 wealthiest members of the National People’s Congress have an average net worth of $1.2 billion each, and then you have a report like this come out?

Werman: How does this work, this accumulation of wealth among these party bosses? You spoke of diamonds and other trade and money getting shipped out of the country. How do they accumulate their wealth?

Magistad: Relatives can use their connections to be able to get sweetheart deals with state enterprises, with international companies coming in. They have knowledge beforehand when a company is going to be listed on the Shanghai stock exchange, and so they can make money through insider trading. Keep in mind that since 2006 the current administration has made a point of strengthening the state enterprise sector at the expense of private businesses, and since the party controls the state enterprise sector, they can dole out whatever party favors they want to to relatives and friends. And sometimes the relatives and friends just kind of know how to work the system, whether or not dad or their uncle, or their brother-in-law is helping them out.

Werman: The World’s Mary Kay Magistad in Beijing. Always great to speak. Thanks for explaining this to us, Mary Kay.

Magistad: Thank you, Marco.

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