JP Morgan isn’t the only big financial firm to have hired Chinese Communist Party scions

The children or children-in-law of four out of nine of the last Politburo Standing Committee work in finance.
The children or children-in-law of four out of nine of the last Politburo Standing Committee work in finance.
Image: AP Photo/Ng Han Gua
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This item has been corrected.

JP Morgan has landed itself in hot water with the US Securities and Exchange Commission for hiring the offspring of both China’s head railways honcho and a former Chinese banking regulator who now heads up China Everbright Group, a financial services company. Though it’s not clear that these hires gave JP Morgan any more business from China Railway Group or Everbright, they certainly raise some questions.

But JP Morgan was hardly bucking the status quo; the org charts of China’s financial world are dotted with “princelings” or guan er dai, as the children of government officials are colloquially known. (There are even a few examples of guan san dai, the grandchildren of government officials.)

Princelings are valuable to investment banks because they help score business. As one private equity executive put it to the Financial Times, “you don’t say no to a princeling” (paywall). Another advantage is “problem-solving skills,” as one Chinese banker put it to the Sydney Morning Herald—the ability to influence regulatory decisions, such as approval for public listings for state-owned firms.

In addition to the JP Morgan examples, the son-in-law of one powerful leader “was key to securing Merrill’s mandate” (paywall) in Industrial and Commercial Bank of China’s $14 billion Hong Kong IPO in 2006—which combined with its Shanghai dual listing, was then the biggest IPO in the world. As the Herald reported, the son-in-law of a former railway minister was instrumental in winning Macquarie the Hong Kong IPO deal for China Railway Construction Corp, the railway arm of the People’s Liberation Army.

Here’s a roundup of the most prominent examples of princelings in finance. (Except where stated, this does not imply that they used political connections to help their employers. Also, some of these are based on a reports a few months old; we have not been able to verify in every case whether the person named is still in the job.)

Bank of America Merrill Lynch

Margaret Ren, daughter-in-law of former premier Zhao Ziyang, is China executive and chairman at Bank of America Merrill Lynch, where her job is expanding client relations in China. A career investment banker, Ren has served as chairman for China corporate finance for BNP Paribas, and of China investment banking at Merrill Lynch. She also worked at Citigroup, where, in 2004, the SEC investigated her for allegedly misleading the company and regulators; it ultimately cleared Ren of wrongdoing.

Wilson Feng, son-in-law of Wu Bangguo, the former number two in the Chinese communist party, led up Merrill Lynch’s China investment banking team, where he helped land ICBC’s IPO. Feng eventually left for the private equity world, taking the reins of a state-owned nuclear investment fund.

Janice Hu, the granddaughter of Hu Yaobang, former head of the party, also had a stint at Merrill Lynch before joining Credit Suisse.

Credit Suisse

In 2005, Credit Suisse hired Janice Hu as head of investment in Hong Kong, reports the Wall Street Journal (paywall). Wen Ruchun, the daughter of more recent former Chinese premier Wen Jiabao, worked for Credit Suisse in Beijing at one time.

Morgan Stanley

The daughter of Chen Yuan, who leads China Development Bank, worked for Morgan Stanley before heading off to Harvard Business School, according to the FT. Despite having a PhD in meteorology, Levin Zhu, son of former premier Zhu Rongji, runs China’s leading investment bank, China International Capital Corp. Morgan Stanley once held a 34% stake in CICC, which is currently gearing up for a public listing; that stake was taken over by private equity groups Kohlberg Kravis Roberts and TPG Capital.

Morgan Stanley’s experience shows how political ties don’t always benefit investment banks. Zhu used his political clout to sideline Morgan Stanley from CICC management decisions, reported Reuters.

Macquarie Group

Raymond Sun, son-in-law of one-time railway minister Fu Zhihuan, worked on IPOs for Macquarie, as mentioned earlier. The bank’s Shanghai office hired Ronald Liu, son of China’s former banking regulator, Liu Mingkang, in 2006, as it prepared to compete for Minsheng Bank’s IPO. The younger Liu was known for his integrity, and resigned due to a conflict of interest, reports the Herald.

Deutsche Bank

The daughter of Wang Yang, one of China’s vice-premiers, works for Deutsche Bank in Hong Kong, reports the FT (paywall).

Goldman Sachs

Alvin Jiang, the grandson of Jiang Zemin, former president, worked for Goldman Sachs, according to the Wall Street Journal (paywall).


Li Wangzhi, son of Bo Xilai, the former Chongqing party boss whose corruption trial starts this week, once worked for Citigroup. Zhao’s daughter, Margaret Ren, also worked for Citigroup in the mid-2000s.

Hedge funds

Nicholas Zhang, the son-in-law of Wang Yang, one of China’s vice-premiers, recently launched a hedge fund focused on mainland stocks, as the South China Morning Post reported in July. The fund, Magnolia Capital Management, “raised tens of millions of US dollars” in just months. Zhang had brief stints at Soros Fund Management’s Hong Kong office, as well as at UBS, reports SCMP.

Private equity

As well as having a daughter who worked at Credit Suisse, former premier Wen Jiabao has a son, Winston, who formed New Horizon Capital, a private equity firm, in 2005. And though he pulled back from day-to-day management due to concerns about conflicts of interest, Winston Wen still has a role in its management, reports the Financial Times (paywall). Investors include Deutsche Bank, JPMorgan and UBS (paywall).

After working for Goldman Sachs, Alvin Jiang founded Boyu Capital, a billion-dollar Hong Kong-based private equity firm, which is funded in part by Hong Kong’s richest man, Li Ka-shing. And He Jintao, the son of former Party head He Guoqiang, just launched a $500 million fund of his new private equity firm, Nepoch Capital.

After leaving Macquarie Group, Ronald Liu, the former banking regulator’s son, left to run a $1.32 billion fund of the Hong Kong-based private equity arm of CITIC, a company that is “dominated by princelings” (paywall). There he reports to Liu Lefei, son of Liu Yunshan, a new member of the Politburo standing committee, who succeeded current Chinese president Xi Jinping as president of the Central Party School.

Li Tong, the daughter of former propaganda chief Li Changchun, is deputy chief executive of Bank of China International, the bank’s investment-banking arm, where she also heads up a media sector-focused investment fund.

Correction (Aug. 20, 2013, 6:30 EST): This item has been corrected to reflect that it was Li Wangzhi and not Bo Guagua, Bo Xilai’s other son, who worked for Citigroup.