Panama Papers irk Chinese authorities; get wiped out by the Great Firewall

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Panama Papers irk Chinese authorities; get wiped out by the Great Firewall

It's basic practice for China to suppress any news that shows senior Communist party members in a bad light. Which is why the Panama Papers are incredibly vexing for the authorities.

The first reaction to massive report that claims to document shady business dealings of the who's who of the global elite has been the most obvious one: to scrub the internet of any mention about the juicy disclosures about several well-connected Chinese.

The initial reporting, so far, hints that a number of Chinese nationals with high-level government ties have dealt with Mossack Fonseca, the Panamanian law firm at the centre of the leak.

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The Panama Papers, if you've been living under a rock for the past two days, is the result of a year-long collaboration between a German newspaper, Suddeutsche Zeitung, the International Consortium of Investigative Journalists and 107 media outlets which set out to expose "a cast of characters who use offshore companies to facilitate bribery, arms deals, tax evasion and drug trafficking."

That includes, by ICIJ's count, dirt on 140 political figures, including 12 current or former heads of state.

It names the family members of eight current or former members of China's politburo, according to the Guardian's tally.

Some of the people implicated include Chinese President Xi Jinping's family.

One of the people named in the leaks is Xi's brother-in-law Deng Jiagui, who set up two British Virgin Islands companies in 2009 when his famous relation was a member of the Politburo Standing Committee but not yet president.

Xi Jinping's family used offshore tax havens to conceal their fortunes: Panama Papers leak

Another is Li Xiaolin, the tycoon daughter of China's former premier, Li Peng. It lists Hong Kong as a source of key "active intermediaries" in the secretive work.

According to the Guardian, an internal Mossack Fonseca survey found the biggest proportion of its offshore company owners came from mainland China, followed by Hong Kong.

In fact, Mossack Fonseca has offices in eight Chinese cities including Hong Kong, its website shows, more than any other country.

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The clamp down

China moved quickly to silence any and all discussion by using the giant state apparatus known as the Great Firewall of China.

Internet censors and state media outlets, meanwhile, ignored reports on the revelations.

"Find and delete reprinted reports on the Panama Papers," wrote one provincial propaganda department, according to a circular leaked by the California-based website China Digital Times. "Do not follow up on related content, no exceptions. If material from foreign media attacking China is found on any website, it will be dealt with severely."

China's Foreign Ministry spokesman Hong Lei brushed off questions about the Panama Papers at a scheduled press briefing on Tuesday. "For such groundless accusations I have no comment," he said.

And because most of China was enjoying a long weekend when the Panama Papers were released, the latest report did not immediately make waves online.

"My confidence in socialism has suddenly collapsed," wrote one user, before the post was promptly removed.

Another said: "It turns out that the Communist Party has no desire to enlighten the public about this. I guess many top leaders are involved."

A Mossack Fonseca survey found the biggest proportion of offshore company owners came from China

Searches for 'Panama Papers' on Baidu, China's leading search engine, produce the response: "the search results do not conform with relevant rules and policies, so they are not displayed. Please try other key words."

A state-run newspaper - The Global Times - has gone as far as to claim that "hostile Western forces are behind the Panama Papers.

Such actions were "a new means for the ideology-allied Western nations to strike a blow to non-Western political elites and key organisations" as part of an exercise in "disinformation", the editorial added.

Cause and effect

While it's not really against the law to have offshore financial holdings, the personal finances of Chinese leaders and their families is a hugely sensitive issue thanks to the ongoing anti-corruptor campaign that has been helmed by Xi.

In 2012, investigations by the New York Times and Bloomberg News revealed the wealth and business dealings of family members of both Xi and former premier Wen Jiabao. The reports were blocked in China and resulted in both companies being denied some journalist visas for several years.

In 2014, a report jointly published by the ICIJ and the Center for Public Integrity found 22,000 alleged tax haven clients from Hong Kong and China. That investigation found offshore accounts linked to more than a dozen of China's richest people, including executives from state-owned firms caught up in corruption probes.

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In fact, according to a 2011 report by the People's Bank of China, corrupt Chinese officials have moved more than $120 billion overseas.

How the authorities will deal with those names still remains to be seen but there's no doubt that those proceedings will be conducted far away from the public eye.

But it will definitely be interesting to see whether Xi will take action against his own family to set an example.

Or whether his anti-corruption campaign is, in reality, incredibly selective as has been previously suspected.

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Aleesha Matharu

Aleesha Matharu @almatharu