China BriefingChinese leaders’ business affairs should be as clear as a US$15,000 crystal horse from Deutsche Bank

An exposé has revealed Deutsche Bank showered Chinese leaders with gifts, including a US$15,000 crystal horse and a Bang & Olufsen sound system

It highlights a political taboo – the need for transparency in the business activities of Chinese leaders and their families

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The Deutsche Bank headquarters in Frankfurt. Photo: AFP

Published: 9:30am, 19 Oct 2019Updated: 9:32am, 19 Oct 2019

On Wednesday, The New York Times ran an intriguing story on its front page on how Deutsche Bank won business in China “by charming and enriching the country’s political elite”.

It is fascinating mainly because the story is based upon internal confidential documents, prepared by the bank and its outside lawyers, that were obtained by the German newspaper Suddeutsche Zeitung.

It showed how the bank had showered top Chinese leaders with lavish gifts, and their relatives and associates with expensive golf outings, paid millions of dollars to Chinese consultants for access to top leaders, and hired more than 100 relatives of the Communist Party’s elite, many of whom were deemed unqualified.

Over the years, one has heard interesting coffee table rumours about how the multinationals, particularly those international investment banks eyeing big fat fees for underwriting mega initial public offerings of the major Chinese state firms in Hong Kong and New York, had gone out of their way to ingratiate themselves with the ruling elite to get deals.

Fighting corruption is what has helped Chinese President Xi Jinping consolidate his power. Photo: AFP

But this story nailed it because the info came straight from the horse’s mouth in the form of documents that cover a 15-year period and include spreadsheets, emails, internal investigative reports and transcripts involving senior executives. But the focus seems to be on the period from 2002 to 2012.

However, it should be no surprise to anyone who is familiar with the freewheeling first 10 years of the 21st century in China when the economy was booming. During this time, official corruption was rampant because of weak governance and, in particular, sons and daughters and close associates of various powerful families cooked up elaborate schemes to make big easy money or use their political connections to land well-paid jobs. In fact, widespread public discontent with rampant official corruption was one of the key factors that enabled President Xi Jinping to consolidate his power by launching an unprecedented anti-graft campaign which has netted hundreds of thousands of officials, including senior party and government figures, since he came to power in late 2012.