July 2, 1989

Under Deng, Running China

Has Become a Family Affair
By FOX BUTTERFIELD
Special to The New York Times

When the
HONG KONG, July 1
Reagan Administration complained
about China's sale of missiles to Iran
and Saudi Arabia over the last two
years, Chinese officials denied respon
sibility, saying the arms dealers were
free-lancing, diplomats involved in the
talks say.
"What can you do, it's the kids," the
Chinese officials reportedly said, refer
ring to the offspring of senior Commu
nist leaders. But in this case, one of the
kids turned out to be a man named He
Ping, the son-in-law of Deng Xiaoping,
China's senior leader, the diplomats
said. Mr. He, a former army attache at

the Chinese Embassy in Washington, is

now head of Poly Technologies Inc., an
independent Government enterprise
that buys and sells arms.
Mr. He's role in the missile sales is
only one example of a major change in
Chinese politics over the last decade,
the growth of nepotism.
The elite's growing use of their spe
cial positions to get favored jobs for
their children or to make money has
led to widespread resentment. A main
demand of the democracy movement
was an end to corruption.
SA Family Business'
Nepotism has become so rampant
that diplomats studying the current
power struggle in Beijing say they
must pay attention to an official's
family lineage as well as the more con
ventional factors like ideological differ
ences and factional allegiances.
"Running China is becoming a
family business," said one longtime
Chinese analyst.
Because the Communists have made
great efforts to cloak their personal
lives in secrecy, it is often impossible to
confirm an official's parentage or
family ties. But many Chinese believe
that of the six members of the new
Standing Committee of the Politburo,
the most powerful body in China, two
are sons-in-law of party patriarchs:
Jiang Zemin, the new party General
Secretary (reportedly the son-in-law of
former President Li Xiannian), and Li
Continued on Page 6, Column 1

Deng's China:
Family Ties
Mean Power
Continued From Page 1
Ruihuan, the new propaganda chief
(reportedly the son-in-law of Wan Li, a
Politburo member and Deng associ
ate). A third member, Prime Minister
Li Peng, is widely thought to be a foster
son of the late Zhou Enlai.
Another member of the full Politbu
ro, Li Tieying, is the son of Mr. Deng's
first wife, whom he divorced in the
early 1930's some time before Mr. Li's
birth.
In the army, President Yang Shangkun has used his post as executive vice
chairman and secretary general of the
party's Military Commission to install
a coterie of relatives. His brother,
Yang Baibing, is director of the army's
General Political Department, his sonin-law is Chief of Staff and a nephew is
commander of the 27th Army, the unit
that shot many of the demonstrators in
Beijing earlier this month.
Moreover, in a sign of how Mr.
Deng's policies over the last decade
have created a new interest in making
money, one of Mr. Yang's sons works in.
Kai Li, a business enterprise in Beijing
under the Military Commission, ac
cording to a diplomat who has dealt
with him.
Jobs with foreign joint-venture com
panies or the plethora of new quasi-in
dependent Government-backed com
panies are particularly sought after.
Prime Minister Li's wife, Zhu Lin,
works in the Beijing office of the Daya
Bay Nuclear Power Plant, a joint
development on the South China Sea
near the Hong Kong border between
China and the Hong Kong company,
China Light and Power.
At least until Zhao Ziyang was
purged as General Secretary last
week, his daughter worked as an
assistant manager of the Sheraton
Great Wall Hotel in Beijing. One of his
sons, Zhao Dajun, was involved in im
porting color television sets and other
freewheeling business ventures in
Shenzhen, the rapidly growing eco
nomic zone on the Hong Kong border.
Family Comes First
In traditional China, where the
family was all-important, taking prece
dence over the individual and often the
state, such use of family connections
was commonplace. But after the Com
munists' triumph in 1949, it came to be
believed by Chinese and foreign spe
cialists alike that Mao Zedong's insist
ence on egalitarianism had stamped
out nepotism.

It was only after Mao's death in 1976

and China's opening to the outside
world by Mr. Deng over the last 10
years that it became clear many Com
munist officials had been carefully
preparing their children's future.

One of their first steps was to send

some of their offspring to universities
in the Soviet Union in the early 1950's.
Both Mr. Jiang, the new party chief,
and Prime Minister Li studied engi
neering there at the time, as did Ye
Xuanping, a son of the late Marshal Ye
Jianying.
The younger Mr. Ye is now Governor
of Guangdong Province near Hong
Kong, China's most affluent region. An
official of Guangdong said the elder
Mr. Ye had agreed to retire as head of
the National People's Congress several
years ago only after Mr. Deng pledged
to promote his son to be Mayor of Can[ ton and then to the governorship. The
Ye family are natives of Guangdong.
Sensitive to Criticism
In the last decade, the Communist
hierarchy has once again moved to
send their children to the best schools
abroad, only now to the United States.
Mr. Deng's younger son, Deng Zhifang,
received his Ph.D. in physics at the'
University of Rochester. Qiao Shi, an- 1
other of the six members of the Stand
ing Committee of the Politburo, has a
daughter who is doing postdoctoral
work at the Baylor College of Medicine
in Houston. And Xu Kui, a granddaugh
ter of Hu Yaobang, who was purged as
General Secretary two years ago, is
now a graduate student at the Univer
sity of Massachusetts.
Mr. Deng has been sensitive about
such criticism of his family, Chinese
say. Mr. Deng's older son, Deng Bufang, has been involved with the Kang
Hua Development Corporation. A large
new Government trading company, it
has come under criticism for buying

raw materials like coal at the low offi

cial price and selling them for huge
profits on the free market.
Mr. Deng's second son, the physicist,
now works for the China International
Trust and Investment Corporation, or
Citic, the biggest of the new Govern
ment firms.
One of Mr. Deng's daughters, Deng
Nan, is also a physicist. She is a deputy
director of a department in the State
Science and Technology Commission.
Her husband is the arms dealer, Mr.
He. He is president of Poly Technolo
gies, a subsidiary of Citic, which has
helped make China the world's fourthor fifth-largest supplier of weapons to
developing nations, according to a Con
gressional report last year. Until Presi
dent Bush imposed a ban on American
military sales to China after the kill
ings in Beijing, Mr. He was negotiating
with several American companies to
buy helicopters and artillery shells, an
American businessman here said.
Mr. Deng has another daughter,
Deng Ling, a painter. Last year she
held an exhibition in Shenzhen across
the border from Hong Kong and sent
invitations to many of Hong Kong's
wealthiest businessmen. An executive
who received an invitation said he had
been "requested" by the local office of
the New China News Agency, which
serves as Beijing's unofficial embassy
in Hong Kong, to buy some of her paint
ings "to make sure the exhibit was a
success,"

"One was not forced to do it, but if

you are astute, you do it," he said. He
bought a painting for more than

$50,000.