Luxury homes tie Chinese communist elite to Hong Kong’s fate
14 Aug 2020

Li Qianxin, the elder daughter of the Chinese Communist Party’s No. 3 leader, has quietly crafted a life in Hong Kong that traverses the city’s financial elite and the secretive world of Chinese politics.

For years, she has mingled with senior executives of state companies through Hong Kong and mainland professional clubs known for grooming the sons and daughters of officials. She has represented Hong Kong in Chinese provincial political advisory groups. She is the chairwoman of a state-owned investment bank based in Hong Kong that has long done business with the relatives of top Chinese officials.

Ms. Li, 38, also has deep financial roots in the city, having bought a $15 million, four-story townhouse perched high above a beach. Her partner owns a now-retired racehorse and spent hundreds of millions on a stake in the storied Peninsula Hotel that he later sold.

Ms. Li and other members of the Communist nobility are embedded in the fabric of Hong Kong’s society and financial system, binding the former British colony closer to the mainland. By building alliances and putting their money into Hong Kong’s real estate, China’s top leaders have inextricably linked themselves to the fate of the city.

As the party now takes a stronger hand in running Hong Kong, the top leadership in Beijing has a vested interest, politically and personally. Ms. Li’s father, Li Zhanshu, oversaw the swift passage of the new national security law for Hong Kong that handed the party a powerful new weapon to quash dissent.

The law could protect the families of the party’s leaders by stopping the protests that wreaked havoc on the economy, or leave them vulnerable by driving down business confidence in the territory. It could also expose them to sanctions.

Already the law has prompted rebukes from foreign countries that could threaten Hong Kong’s access to the global financial system. The Trump administration imposed sanctions on Friday on Hong Kong’s chief executive, Carrie Lam, and 10 other senior officials in the city and the mainland they accuse of curtailing freedoms in Hong Kong.

“Members of the Red aristocracy in China, including the princelings, have made huge investments in Hong Kong,” said Willy Lam, an adjunct professor of China studies at the Chinese University of Hong Kong. “If Hong Kong suddenly loses its financial status, they cannot park their money here.”

One of the leadership’s biggest exposures to Hong Kong is in real estate. Including Ms. Li, relatives of three of the top four members of China’s Communist Party have in recent years bought luxury homes in Hong Kong worth more than $51 million combined, a New York Times investigation shows.

Qi Qiaoqiao, the older sister of Xi Jinping, China’s president, started buying properties in Hong Kong as early as 1991, Hong Kong property records show. Her daughter, Zhang Yannan, owns a villa in Repulse Bay, which she bought in 2009 for $19.3 million, and at least five other apartments, the city’s property and company records indicate.

Wang Xisha, a former Deutsche Bank executive who is the daughter of Wang Yang, the No. 4 party leader, bought a $2 million home in Hong Kong in 2010, according to city property records.

The Communist Party has long been secretive about the riches of many of its leaders’ relatives, aware that such an accumulation of wealth could be seen as the elite abusing their privilege for personal gain. In Hong Kong, the party is also mindful that the presence of princelings could further fan resentment of Beijing.

Ms. Li, like many relatives of top Chinese officials, keeps a low profile.

In the mainland, there are few mentions of Mr. Li’s family in the party-controlled news media, and searches for his daughter’s name on social media sites yield minimal results. A trip to Nangoucun, his ancestral village in northern Hebei Province, offered little insight about his children.

But internal documents from Deutsche Bank obtained by the German newspaper Süddeutsche Zeitung and reviewed by The New York Times late last year referred to a woman with the same name in English and Chinese as the elder daughter of Li Zhanshu, now the No. 3 leader in China. Those documents were part of an internal inquiry stemming from an investigation by the Securities and Exchange Commission into the bank’s politically connected hires.

The Hong Kong identity number that is used by Ms. Li in a Hong Kong corporate record listing the directors of China Construction Bank International is the same one used in the records linked to the beachfront property and a company she owns with her partner.

A well-connected businessman and an associate have confirmed that the Ms. Li who is an executive at China Construction Bank International is the daughter of Li Zhanshu, as does a biography of the official written by Cheng Li, an expert on elite Chinese politics at the Brookings Institution.

The rest of her résumé can be pieced together through news snippets and archived web pages. They showed how Ms. Li has strengthened her ties to the city in ways that position her well for a political career in the mainland.

She joined networks like the Hua Jing Society in Hong Kong that provide a forum for princelings to meet the children of Hong Kong’s tycoons and political class.

In 2013, she and other Hong Kong representatives of the Chinese People’s Political Consultative Conference, or C.P.P.C.C., a party-run political advisory group, helped organize relief funds for a village. Two years later, she visited farmers and carried toddlers in the same province to promote the United Front Work Department, a party unit that develops overseas political networks.

Ms. Li is now the chairwoman of China Construction Bank International, the investment arm of a major state lender, according to corporate records in Beijing. Ms. Li, her partner and the bank have not responded to multiple requests for comment from The Times.

“There is often an assumption that simply being well connected is enough to get ahead in Chinese politics,” said Rana Mitter, a professor of Chinese history and politics at Oxford University, who did not comment specifically about Ms. Li. “Actually, there is still a great deal of interest in candidates proving themselves for higher office in institutions such as the Communist Youth League and the C.P.P.C.C.”

Like many other members of China’s Communist elite, she has amassed significant wealth, according to a review of company and property documents filed in Hong Kong. Ms. Li also took advantage of a tax haven popular with the world’s elite.

By Alexandra Stevenson and Michael Forsythe, The New York Times, 12 August 2020

Read more at The New York Times

RiskScreen: Eliminating Financial Crime with Smart Technology

Advance your CPD minutes for this content, by signing up and using the CPD Wallet