Despite the fact that relatives of eight of China’s most senior officials were implicated in the Panama Papers released last week, the Chinese public knows little about it. Citizens of other affected countries have been calling for investigations, even leading to the resignation of named leaders, like Icelandic Prime Minister Sigmundur David Gunnlaugsson.
But China’s Central Propaganda Department mounted an aggressive campaign to block all mention of the Panama Papers on social media sites, search engines and in the news media.
Censorship pressure has even extended to Hong Kong where a top editor was fired Wednesday after the publication of a story about the Panama Papers, raising concerns that Beijing is encroaching on the semi-autonomous city.
In Mainland China, censorship has been predictably more rigorous.
“The vast majority of people probably know nothing,” said Andrew Wedeman from Georgia State University, an expert on China’s political economy and corruption.
The papers show that President Xi Jinping’s brother-in-law Deng Jiagui, along with relatives of seven other current and former members of the Communist Party of China’s (CCP) Politburo Standing Committee, controlled offshore companies that were clients of Mossack Fonseca, the Panamanian corporate service provider infamous for helping powerful individuals hide their assets from public scrutiny.
Though offshore firms are often used for nefarious purposes like money laundering, there is no indication that any of China’s officials were involved in illegal activity.
Still, registering or investing in overseas companies is against the CCP’s policies, and the allegations are potentially damaging for Xi, who has made fighting government corruption a defining point of his presidency.
“It’s hard to know whether Xi himself is implicated in potential illegal activity or if any of the other officials’ family members are, but to some extent, that’s all besides the point,” said Sarah Cook, director of the China Media Bulletin at Freedom House.
According to Cook, the CCP’s fierce reaction indicates their concern that this information poses a real threat to the party’s legitimacy. The papers show that China’s political and economic elite are very closely intertwined, and that they are not willing to be subject to the country’s taxing and financial management systems that they themselves control. China’s economic downturn makes these issues particularly sensitive.
Because strict capital controls make it very difficult to get money out of China legally, Mossack Fonseca’s operations have attracted the business of many Chinese with money to hide. China is the source of almost 30 percent of Mossack Fonseca’s clientele and the Panamanian law firm has more offices in China than any other country.
President Xi’s campaign to root out corruption has been, among more noble goals, a means of removing political opponents and consolidating power.
“By my guess, 150,000 people have been indicted for corruption. Of those, a few hundred indictments were probably politically motivated,” said Wedeman.
But in the Panama Papers case, Xi cannot simply remove the accused from power — first, because he himself is implicated through his brother-in-law, and secondly because those named come from across different factions and generations of the party.
“When you’ve got these cross-cutting implications about current and past members of the Politburo Standing Committee, that implicates the whole party,” said Cook.
China’s efforts to squash the Panama Papers scandal are even more curious when you consider that most of the information is not new. Bloomberg reported the details of Xi’s brother-in-law’s holdings in 2012, and Deng Jiagui actually got rid of those accounts by the time Xi assumed his current position.
“A lot of these revelations had been known before, but of course they were widely censored then too,” said Cook. “So the fact that there’s this other opportunity for this information to be shared, even if those of us outside of China might be more aware than people inside China, is significant.”
According to Cook, the Panama Papers’ release came at a bad time for Xi because of recent public statements criticizing his leadership in China. In recent weeks, a top journalist resigned in opposition to the CCP’s policies and an anonymous letter was posted by an alleged party insider urging Xi Jinping to step down. The government has responded with censorship, major investigations, and the detainment of several individuals.
But the Panama Papers story is much harder to control than those domestic disputes. Because the story is receiving international attention, it is considerably more difficult for censors to control the story’s dissemination within China, despite recently adding the Guardian, Time, and Economist websites a long list of banned Internet websites.
News stories in China mentioned the resignation of the Icelandic prime minister without mentioning the Panama Papers at all. Some English language sources, like Chinese government controlled CCTV in the U.S., reported on the Panama Papers without mention of China, but those stories were later deleted.
Censors have gone as far as to block searches of words such as “brother-in-law,” and a leaked Communist directive instructed news organizations to “Please self-inspect and delete all content related to the ‘Panama Papers’ leak,” according to China Digital Times.
But some Chinese individuals are getting around the censors by using code words like “eight-nama,” instead of “panama,” referring to the eight officials who were implicated. Other activists have posted screenshots of articles.
In general, people who are tech-savvy have ways of getting around China’s so-called “Great Firewall” and accessing foreign sites.
“They don’t have to stop everybody in China from knowing about this, but they want to stop the masses from knowing about this so that it doesn’t trigger large-scale protests,” said Cook.
China’s censors have so far been successful in that effort.
Erica Evans is a Journalism Associate at The Cipher Brief.
