Princelings sure sound cute don't they? And hey even Dreamworks has one. If it didn't, then the company's $330 million deal to create a Shanghai animation outpost would've never happened.
In Friday's New York Times, David Barboza and Sharon LaFraniere have a great report on how relatives of Chinese officials have parlayed their family connections into well-paid roles as dealmakers between businesses like Dreamworks, Microsoft, and Nokia and the Chinese government. These so-called princelings have brokered deals in the finance, energy, domestic security, and entertainment industries. In other words, it's nepotism at its finest.
Corruption in Chinese businesses has become Barboza's beat--if you recall, he had that story of rampant bribery in China's journalism industry and he's also the journo behind a little story you may remember about Foxonn and Apple. His and LaFraniere's is just as eye-opening. If you're a a CEO interested in making some deals in China, here are the princelings you should be courting (and how to get away with it):
For example, Wen Yunsong, the son of Prime Minister Wen Jiabao, heads a state-owned company that boasts that it will soon be Asia’s largest satellite communications operator. President Hu Jintao’s son, Hu Haifeng, once managed a state-controlled firm that held a monopoly on security scanners used in China’s airports, shipping ports and subway stations. And in 2006, Feng Shaodong, the son-in-law of Wu Bangguo, the party’s second-ranking official, helped Merrill Lynch win a deal to arrange the $22 billion public listing of the giant state-run bank I.C.B.C., in what became the world’s largest initial public stock offering.
Much of the income earned by families of senior leaders may be entirely legal. But it is all but impossible to distinguish between legitimate and ill-gotten gains because there is no public disclosure of the wealth of officials and their relatives. Conflict-of-interest laws are weak or nonexistent. And the business dealings of the political elite are heavily censored in the state-controlled news media.
This article is from the archive of our partner The Wire.
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