Murdoch spared no effort in trying to charm his way into the Chinese
marketplace, including via
important princelings. In 1995 he instructed his Harper Collins publishing house to print a hagiographical book about Deng Xiaoping, the late leader of China, written by his daughter, Deng Rong, whose husband ran one of China's main arms trading conglomerates. In 2001, his News Corporation led a consortium with investment bank Goldman Sachs to inject $325 million of capital into China Netcom, controlled by a U.S.-educated entrepreneur named Jiang Mianheng, whom he had been courting. The company was on the verge of bankruptcy but turned to gold the following year when Jiang's father, then-President Jiang Zemin, transferred a third of the assets of China's monopoly fixed-line telecommunications company into a new, merged Netcom entity.
In 2002, Zeng Qinghong was promoted to the Politburo Standing Committee, and then vice president, while his patron Jiang gradually bowed out from frontline duties. Ambitious politicians, officials and entrepreneurs continued to ply the Zeng family with praise and favors, and share in its glory. "Talking about all these princelings taking positions in government and wealth in the private sector, I think it's quite natural and may not be a bad thing," says the Chinese head of a foreign investment bank in China. "If it's not them making money, it would be somebody else." He adds that Zeng Wei is a personal friend who is "honest" and "a nice guy."
Zeng Qinghong's portfolio included managing mainland China's relationship with Hong Kong. His Hong Kong-based brother Zeng Qinghuai earned a reputation for aggressively muscling into business opportunities and facilitating compromises with Hong Kong businesspeople who encountered regulatory problems on the mainland. In 2010, a consortium reportedly involving Zeng Wei, Zeng Qinghuai, and convicted stock market speculators was barred from buying a Taiwanese insurance company. A businessman who knows Zeng Qinghuai says one of his more recent projects is China's tallest building, Shenzhen's recently completed Kingkey 100.
As for Zeng Wei, his business empire stretches to the midwest province of Shanxi, where in recent years he has joined with local coal barons desperately searching for protection from the risk of officials and entrepreneurs further up the food chain appropriating their assets. Business sources say one of his coal-baron partners hosted the wedding of a daughter at a beach resort in March, where the dowry alone reportedly consisted of six Ferraris.
Zeng Wei also grew close to Dai Yong'ge and his billionaire sister Xiuli Hawken, respectively the CEO and largest shareholder of Hong Kong's Renhe Commercial, a company whose competitive advantage lies in winning approvals from a quasi-military agency to convert underground bomb shelters into upmarket shopping centers around China. In 2004 Zeng Wei's dance-school graduate wife Jiang Mei was appointed as a director of an Australian company, Renhe International, alongside Dai and Hawken. In November 2006 Zeng and his wife joined Dai and Hawken as directors of another company in Australia, Fruit Master International. Zeng's wife had been working with Renhe since 2002 and was appointed as a director of the Renhe group board in December 2007, around the time the couple were buying their harbor-side home opposite the mansion that used to be owned by Lachlan Murdoch.
(The price of Renhe corporate bonds has tanked in recent weeks, to 60 cents in
the dollar, as investors fret over the value of the company's connection with
Zeng Wei. "The value of the underground bomb shelters is equal to the value of
the guanxi, and that is not disclosed in the prospectus," says a
Singapore-based debt trader at an investment bank. "And if there's a war they
have to hand the bomb shelter back.")
In the end, Murdoch's prodigious lobbying efforts failed and he pulled Star TV out of the Chinese market. It seems the lasting legacy of Murdoch's extravagant hospitality to Zeng Qinghong was his son's subsequent decision to join Australia's business migration program. The Zeng family spends most of its time in Beijing, where they have a villa in the comfortable but not overly ostentatious Yosemite compound (developed, as it happens, by Luneng). But Zeng Wei would like his two sons to be educated in Australia, far from the white-knuckle adventures of Chinese politics and business, according to family representatives in Australia, just as his father had wanted him to be.
The risk of regulatory scrutiny, while his father was embroiled in ruthless factional contest involving the former, current and future presidents, may have hastened Zeng Wei's search for an overseas refuge, according to his Beijing friends. Last year Zhang Chunjiang, who ran China Netcom and was close friends with the son of former president Jiang, was given a suspended death sentence for corruption in relation to a subsequent role. In 2010, Zeng Wei's old friend at the Securities Regulatory Commission, Wang Yi, was also sentenced to death with a two-year reprieve for corruption, again relating to a subsequent role. Both sentences are expected to be commuted to life imprisonment, and neither case was explicitly connected with Zeng Wei, but no doubt it gave him pause for thought. The pioneers of princeling politics had been warned.
But then again, Zeng should be fine. The Communist Party has proven over 25 years that it hasn't got the stomach to discipline its children.