Montreal’s Power Corp. deepens ties with China’s prominent Bo family

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The scion of one of China’s best-known political dynasties, whose father remains in jail after challenging the leadership ambitions of President Xi Jinping, is working for Power Corp., the Canadian company with deep Chinese business interests.

Bo Guagua is the foreign-educated son of a former Chinese political star. He occupied a central role in a murder drama that would send both his parents to jail, bring to light high-level Communist Party infighting and cast out his father, Bo Xilai, from the party firmament he once strove to lead.

Power Corp., with its globe-straddling portfolio of financial, sportswear, construction and petroleum assets, has played a central role in corporate and political relations between Canada and China for decades. Its relationship with the younger Mr. Bo is disclosed in a New York attorney database, and was confirmed by the company.

Mr. Bo, 32, has worked for 2½ years as a business analyst with Montreal-headquartered Power Corp. He joined the company “through an internship program,” Stéphane Lemay, Power Corp. vice-president and general counsel, said in a statement to The Globe and Mail.

His father, the charismatic former mayor of Dalian and Communist Party chief in Chongqing, was widely seen as a rival to Mr. Xi before a court sentenced him to life in prison for corruption in 2013.

The company’s employment of Mr. Bo has raised eyebrows among some observers of Chinese elite politics, who point to the potential risk in associating with the Bo family – despite indications that the family continues to enjoy considerable influence.

For Power Corp. to hire the younger Mr. Bo is “a bit mind-boggling,” said Willy Lam, an expert on Chinese elite politics at The Chinese University of Hong Kong. ”Bo Xilai wanted Xi Jinping’s job, it was quite clear. I don’t suppose Power Corp. would want to cultivate the image of employing the son of one of Xi Jinping’s major enemies.”

At the same time, his employment in Canada sheds new light on the intricacies of Chinese political power and on the connections Power Corp. has cultivated in the country, even amid changes in leadership and the fractious diplomatic dispute between Beijing and Ottawa over the past year.

Power Corp. was among the first Western investors to enter China more than four decades ago, and has “maintained very good relations with many of China’s leaders throughout these years, including with the Bo family,” Mr. Lemay said. “We are proud of our long-standing presence and investments in China, where we remain a highly respected corporate group.”

Mr. Bo did not respond to an interview request.

But the death of Mr. Bo’s aunt, Bo Jieying, in late November illustrated the family’s continued influence in vivid fashion. According to pictures widely circulated on Chinese media, flowers were sent to her Dec. 4 funeral by the descendants of Deng Xiaoping, China’s late paramount leader, and Liu Shaoqi, the man once considered the likely successor to Mao Zedong.

“That is an indication that these groups still maintain their connections, and they are still influential in Chinese political and business circles,” said Feng Chongyi, a scholar at Australia’s University of Technology Sydney, who studies contemporary Chinese history and maintains a wide network of contacts in China for his research.

As a result, Mr. Bo, by virtue of his connection to second and third-generation red figures – people with a family lineage to Communist revolutionary founders – remains likely to enjoy access to powerful people in China, a country where Communist aristocracy wields significant influence in the economic establishment, Prof. Feng said.

The young Mr. Bo could be seen as “something rare and worth hoarding,” said Zhang Lifan, a party historian and critic. “One of the characteristics of hong’erdai” – the red second generation – “is that they remain in touch, even though sometimes their fathers or grandfathers harbour deep-seated hatreds.”

For Power Corp., Mr. Bo is the third generation connection between a wealthy Canadian lineage and a Chinese family that has wielded national influence for nearly a century. Paul Desmarais, Sr., whose family has controlled Power Corp. since 1968, established an early relationship with Mr. Bo’s grandfather, Bo Yibo, who is said to have visited the Desmarais home in Canada in the late 1970s.

In 1997, André Desmarais, then president of Power Corp., met Bo Yibo in Beijing for a private audience, a meeting he described as an “exceptional privilege” to sit down with “an idol of genuine historic importance.” (Last week, the Desmarais family said it would step away from executive roles at Power, but will retain leadership of the board of directors.)

At the same time, Power Corp. built a relationship with Bo Xilai, an unusually charismatic and media-friendly leader whose fast-rising star suggested a trajectory that would place him in the country’s highest halls of power. It was an important relationship for Canada, too, as Ottawa sought links with a man seen as China’s future leader. Former prime minister Jean Chrétien – the father-in-law of André Desmarais – once called Bo Xilai an “old friend.” Stephen Harper was the last foreign leader to meet Bo Xilai before his dramatic downfall.

The younger Mr. Bo occupied an important, although indirect, role in that fall from grace. The family paid a British businessman, Neil Heywood, to help take care of him in Britain after he moved there to attend school. But Mr. Bo’s mother killed Mr. Heywood after a dispute over funds in which the British man held Mr. Bo in an apartment against his will and wrote threatening e-mails, according to Chinese court testimony.

Chinese authorities arrested his mother, Gu Kailai, for murder on the same day in 2012 that the party booted his father from the Politburo, the 25-person group that is the country’s second most important decision-making body. Ms. Gu received a suspended life sentence.

Mr. Bo has not been implicated in any crime. On the day his parents were detained, he was a student at the Harvard Kennedy School, barely a month from graduating with a masters degree in public policy. It was the midpoint of an elite education that saw him study at Harrow School, University of Oxford and, most recently, Columbia Law School, where he graduated in 2016 with a doctorate in law.

In a 2012 statement to The Harvard Crimson, he emphasized his high academic performance and personal leadership, including as president of the Politics, Philosophy and Economics Society at Oxford and as the first mainland Chinese student elected to the Standing Committee of the Oxford Union.

Mr. Bo passed the New York bar exam in 2016, state records show. He was admitted as a New York attorney in mid-2017, according to registration documents that list his company as Power Corp., with a Toronto address and Montreal phone number.

For the Desmarais and Bo families, “this is a story of mutual loyalty across three generations. No more, no less,” said Jeremy Paltiel, an expert on China at Carleton University.

In China, loyalty to the right family can bring long-term rewards.

Though the past century of Chinese history has been frequently turbulent – with warring between Communist and Nationalist forces followed by Mao Zedong’s bloody campaigns and purges – power has remained in remarkably constant hands.

David Goodman, a scholar at Xi’an Jiaotong-Liverpool University who studies Communist Party history and political change in the country, has surveyed 496 wealthy Chinese and found that 82 per cent had at least one grandparent who formed part of the local elite before 1949, when Mao took control of the country. There is a “historical continuity” in China’s elite power, he said.

The Bo family is no exception. Mr. Bo’s grandfather, Bo Yibo, joined the Communist Party in 1925, served as its first finance minister and became one of the Eight Immortals, the party elders who supported Deng Xiaoping as he remade the economic underpinnings of the country.

Bo Xilai, in turn, enjoyed a meteoric political career before losing out to fierce factional strife. But the party has a history of forbearance toward family members of downfallen elites.

Indeed, Mr. Bo “made a family visit while his parents were already under a cloud and was permitted to go abroad, apparently with the permission of the Chinese leadership,” said Dali Yang, a political scientist at the University of Chicago. “His half brother remains in China. They are apparently given room to operate as long as they don’t seek to politically challenge the verdict on their parents or the authorities.”

And Power Corp. “is one of the Canadian companies that plays the very long game,” said Paul Evans, a China scholar at the University of British Columbia. The Bo family may be far from power today. But over the long term, “worms turn,” he said. In the short term, Mr. Bo “could have insights into individuals and their business operations that a company as sophisticated as Power Corp. could take advantage of.”

Hiring the “princeling” children of Chinese elite has proven risky for other companies. In recent years, Deutsche Bank, JPMorgan and Credit Suisse have all paid multimillion-dollar settlements to U.S. authorities over allegations that they violated corruption law by hiring relatives of Chinese officials in order to win business. Those practices have also earned criticism from the Chinese community.

"Many powerful officials have offspring working for overseas companies. It shows that this Chinese mode of doing business is now spreading worldwide on a global level. It’s like a terrible virus,” said Yu Jie, a prominent Chinese dissident writer living in the U.S. Such conduct “must be exposed and investigated,” he said. “Employment of this nature is not the result of free market forces.”

Still, for Power Corp. to employ Mr. Bo is “a great investment,” Prof. Goodman said. ”You’re buying influence.”

With a report from Alexandra Li