Amidst the complexities of running a country of more than 1.4 billion people, China often uncovers scandalous cases of corruption among top-level officials in all fields, which in many cases involve the transfer of their vast fortunes overseas.
As crimes involving the use of public money are widespread, they have become one of the greatest threats to the stability of the Chinese communist regime, while the fortunes of thousands of officials and their families are growing, as are those of the so-called ‘princes’, who, to secure their possessions, tend to send them to other countries.
At the same time, inequality indicators show that the vast majority of the population has no access to basic social services such as health. Also, education services are so scarce and deficient that most of them are financed by local governments, with a contribution of only 1% from the central government based in the capital, Beijing.
New Zealand as a paradise
New Zealand has positioned itself as a kind of paradise where the world’s big tycoons have been acquiring huge tracts of land. Likewise, for top CCP officials, it is also an attractive place as a haven for their relatives and their investments.
In this regard, Chinese billionaire Miles Guo, a resident of New York, USA, recounted in 2020 that one of the leaders who immigrated to New Zealand was Fang Fenghui, a former general chief of the Joint Chiefs of Staff of the Chinese People’s Liberation Army jailed for life for corruption. The offenses against him included giving and receiving bribes, and obtaining huge sums of money from unknown origin. Fenghui allegedly transferred to this country to “hide his illegitimate children”.
Like him, there are more than a thousand, “the corrupted members of the CCP have long chosen New Zealand as their Treasure Island to hide wealth they have stolen from Chinese people not just for themselves, but also for their mistresses and their numerous illegitimate children,” Guo said.
Another CCP tycoon with investments in New Zealand would be Sun Lijun, a former vice minister of Public Security, who reportedly owns a dozen mansions and a couple of apartment buildings, as well as gold bullion and artwork allegedly obtained illegally.
Then came many of China’s wealthy individuals, including Ma Mingzhe, the former chairman and CEO of Ping An Insurance, a business conglomerate dedicated to the insurance and financial services sector, Wang Jian the formerCEO of the airline operator group HNA, Chen Feng, the Chairman of the same group and the billionaire Jack Ma, founder of the online shopping company, Alibaba.
Jack Ma, expressed in 2016 to the New Zealand Prime Minister, John Key, that he wanted to acquire goods in New Zealand, a country that is loved by many Chinese as he put it, “At least 20 of my colleagues retired from Ali Baba. They’re all very young, in their 40s, they all go to New Zealand.”
Among the advantages of New Zealand, when compared to the UK, it has only 5 million inhabitants while the UK is inhabited by 67 million people in roughly the same area.
Likewise, the great distance that separates this country from the great world cities that could collapse in an eventual world hecatomb would represent a protection for the security and luxuries that it offers. For example, it is 18,762 kilometers from the United Kingdom and 12,542 kilometers from the United States, while its nearest neighbor, Fiji, is almost 2,600 kilometers away.
It is common for this country to offer luxurious homes that include tennis courts, swimming pools, media rooms, personal jetties where a family can moor their boat, and even private heliports or, better yet, their own airstrip, making them desirable to the elite.
In this regard, New Economic Thinking Institute president Robert Johnson told participants at the 2015 Davos Economic Forum, “Hedge fund managers from around the world are buying up properties with airstrips and farms in places like New Zealand.”
For his part, author Jim Dobson published in Forbes a map pointing to New Zealand as the only nation in the world that would clearly grow in population, making it one of the safest areas on Earth.
Offshore tax havens
In 2014, a report by the International Consortium of Investigative Journalists (ICIJ) expanded on the wealth of some of China’s most powerful individuals, including so-called princes, those linked by blood or marriage to China’s revolutionary leaders.
Family members of China’s top leaders were among nearly 22,000 clients with overseas investments and addresses in China and Hong Kong. The ICIJ included members of the business elite, who reportedly received help from Western banks to hide their wealth in tax havens. These include the real estate company of the brother-in-law of China’s current president, Xi Jinping, and the son and son-in-law of former premier Wen Jiabao.
In particular, the ICIJ report cites international accounting firms such as KPMG, Ernst & Young, PricewaterhouseCoopers (PwC), Deloitte & Touche and Arthur Andersen, among the promoters of China’s wealth flight abroad. It specifies that PwC helped set up more than 400 offshore accounts through TrustNet for several clients in mainland China, Hong Kong and Taiwan. Likewise, Swiss banking giant UBS helped coordinate more than 1,000 offshore entities with the help of TrustNet.
“By some estimates, between US$1 and US$4 trillion in untraced assets have left the country since 2000,” notes ICIJ. Chinese officials have the law in their favor since they are not obliged to publicly declare all their belongings, and having offshore accounts and possessing wealth does not necessarily imply going against the law.
However, “such quantities of money are easy to associate with corruption, particularly abuse of power and tax evasion” wrote author Michelle Flor Cruz in 2014.
In this regard, “As the country has moved from an insular communist system to a socialist/capitalist hybrid, China has become a leading market for offshore havens that peddle secrecy, tax shelters and streamlined international deal making,” VOA quoted her as saying.
The ICIJ updated in 2017 that wealth was growing in Hong Kong-based tax havens, estimating that assets in this major financial city increased six-fold between 2007 and 2015, with the country then ranking second only to Switzerland as a tax haven headquarters.
Currently, Chinese residents buy overseas real estate mostly through underground banks, which is a crime of illegal foreign exchange trading or covert foreign exchange trading.
As for corruption involving high-ranking officials, officers holding high military ranks can be taken as a reference, since 2013 more than 160 military generals of the Chinese regime have been investigated, according to Dr. Wang Youqun, former supervisor of the Central Discipline Commission of the Chinese Communist Party (CCP). This figure exceeds the total number of generals who died in CCP’s civil wars, external wars and Cultural Revolutions in the past century.
Widespread corruption in the military includes former Chairman of the CCP Central Military Commission, former General Secretary of the Communist Party of China and former President of the People’s Republic of China, Jiang Zemin, who is said to have adopted the strategy of “ruling the army through corruption” to buy the hearts of the people.
The specter of abuses with taxpayers’ money has hung over the stability of the ruling communist regime, to the extent that the current president, Xi Jinping, went so far as to declare that corruption threatens the survival of the sole ruling party, in 2014, a year after his inauguration, shocked by the suspicion of officials squandering those contributions or using their positions for personal gain, as reported by Reuters.
After authorities identified and investigated more than 3,200 so-called “naked” officials in China, at county level or above, with children or spouses who have emigrated abroad, Xinhua media reported that they use their families “as a conduit transferring their ill-gotten assets abroad, and in preparation for their own flight.”
It added: “Personnel departments nationwide have held talks with ‘naked officials’ and asked them to choose between accepting less sensitive posts or bringing their families back to China.” However, at least 1,000 of them rejected both alternatives and chose to refuse to return home, which meant demotion from their positions.
On the other hand, some of the guidelines that underlie the state policy of the CCP are linked to the theories promoted by the Russian leader, Vladimir Ilich Ulyanov, alias Lenin, leader of the Russian Revolution of 1917, from which they take the denomination of neo-Leninists.
For his part, the professor of government at Claremont McKenna College, in California, United States, Minxin Pei, considered in 2009: “The neo-Leninist state practices elitism, draws its support from technocrats, the military, and the police, and co-opts new social elites (professionals and private entrepreneurs) and foreign capital — all vilified under Maoism”.
He added: “Indeed, if current trends continue, China’s political system is more likely to experience decay than democracy,” referring to the possibility of the Chinese regime transforming into a democratic system of government.
The illicit enrichment of CCP elites has been manifest for decades, and according to available data impunity is also on the rise, as Foreign Policy records in its 2009 article in which it looked at the trajectory of this phenomenon over a 14-year period:
“Dishonest officials today face little risk of serious punishment. On average, 140,000 party officials and members were caught in corruption scandals each year in the 1990s, and 5.6 percent of these were criminally prosecuted. In 2004, 170,850 party officials and members were implicated, but only 4,915 (or 2.9 percent) were subject to criminal prosecution. The culture of official impunity is thriving in China”.
Additionally, the same media outlet argues that corruption is widespread at all levels of the administration run by the CCP and notes, “Regional data suggest that large-scale corruption rings account for 30 to 60 percent of all the cases of graft uncovered by authorities.”
It also involves administrative divisions of provincial, county and prefecture governments, involving groups of high-ranking local officials, including party bosses and mayors, who have committed crimes for hire on behalf of “organized gangs involved in murder, extortion, gambling, and prostitution.”
Inequality and poverty
The growing embezzlement of taxpayers’ money is apparently motivated by a lack of trust in the CCP: “In their confessions, corrupt officials often blame their misdeeds on a loss of faith in communism. There is anecdotal evidence that senior party officials have taken to consulting fortune-tellers about their political careers. The ruling elite in China, it appears, is drifting and insecure,” Foreign Policy continues.
In any case, a disproportionate increase in income inequality among the average population is revealed: “A recent study  reports that less than 1 percent of Chinese households control more than 60 percent of the country’s wealth (by comparison, 5 percent of the households in the United States own 60 percent of the wealth)”.
As a reference, we can take the words of Chinese Premier Li Keqiang when referring to the needs suffered by the inhabitants of his country: “Their monthly income barely reaches 1,000 RMB [157 dollars]. It’s not even enough to rent a room in an average Chinese city.” This level of income corresponds to about 600 million Chinese.
These data contrast sharply when considering that the GDP per capita in China for the year 2020 stood at over $10,400 per capita, according to the World Bank report.
In this context, another indicator of the progressive drift of the population towards inequality would be given by the displacement of the members of the new generations of the heirs to power in China towards highly lucrative activities, in a short time: “A generation ago, the offspring of the ruling elite took up positions in the government or military; today, they go into business,” describes Foreign Policy.
The very high profitability they achieve can be seen in the fact that while peasants obtain profits of less than 5% of the value of their land, real estate developers earn 60%, and the rest goes to the coffers of the local government.
In addition, by 2009: “60% of privatized state enterprises were sold to their managers. As a result, 30% of all private-firm owners are now party members.”
Meanwhile, investment in social services such as education and health is increasingly declining and in even more unequal proportions among low-income people: “According to China’s own Ministry of Health, two thirds of the population lacks any type of health insurance, and about half of the sick do not seek professional medical treatment at all,” until that time.
Certainly, the difficulties of the Chinese people seem insurmountable from this perspective, yet the ancient culture contains profound wisdom from which their hope could be derived.
In this regard, the Chinese philosopher Mengzi, also known as “Master Meng,” or Mencius, of the fourth century B.C., whose importance in the Confucian tradition is only surpassed by that of Confucius himself, stated in 300 B.C. that man prospers in times of calamity and hardship, and that he perishes when he lives quietly and comfortably.
He also explained that when Heaven is about to bestow great responsibilities on a man, the individual must know suffering and physical hardship, be exposed to hunger and poverty, and experience upheavals in his life.
In this context, the words of Claremont McKenna Collegue government professor Minxin Pei, referring to the CCP’s destabilizing elitist practices that could spell its eventual demise, are prescient: “In fact, if current trends continue, the Chinese political system is more likely to experience decadence rather than democracy.”