Hong Kong residency draws interest from China's elite

HONG KONG - The massive leak of documents known as the Panama Papers suggests that Hong Kong has played a role of connecting China's elite with a global network of tax havens.

Top officials in China's Communist Party are tied to this link via relatives who have established permanent residency in Hong Kong.

Family members of sitting senior party officials have used identification issued by the Hong Kong government to set up investment companies in tax havens such as the British Virgin Islands, newspaper Ming Pao and other media here reported in early May. Those reports are drawn from millions of files from Panamanian law firm Mossack Fonseca leaked to the International Consortium of Investigative Journalists, of which Ming Pao is a collaborator.

The daughter-in-law of Liu Yunshan, a member of the Politburo Standing Committee and fifth-ranking member of the Communist Party, apparently acquired Hong Kong permanent residency in 2008. The daughter and son-in-law of Vice Premier Zhang Gaoli are reported to reside in a luxury property in the city and go by names pronounced in Cantonese. Relatives of former top officials, including Premier Li Peng and the late Deng Xiaoping, have also made Hong Kong their permanent home.

These family members' reasons for obtaining Hong Kong residency are unclear. One financial industry insider speculated that the comparative ease of doing business in the city could be a driving factor, noting that firmer rule of law in Hong Kong than on the mainland makes real estate investment safer.

Read the full article here