China steps up Panama Papers censorship after leaders’ relatives named

Chinese censors have stepped up their censorship of websites, ordering all content related to the Panama Papers to be scrubbed as new revelations emerged of how relatives of some of the country’s top leaders had used secretive offshore companies to store their wealth.

Documents from the leaked Mossack Fonseca database showed the relations of three of the seven members of the Communist party’s elite ruling council, the politburo standing committee, had companies that were clients of the offshore law firm. They included relatives of Chinese president Xi Jinping.

A Communist party censorship directive instructed news organisations to purge all reports, blogs, bulletin boards and comments relating to this week’s highly sensitive revelations.

“Please self-inspect and delete all content related to the ‘Panama Papers’ leak,” the order said according to China Digital Times, a website run by the University of California, Berkeley.

BBC and CNN broadcasts about the revelations have been blocked all week in mainland China.

The Guardian’s website appeared to have been partially blocked on Thursday afternoon, with stories including those relating to the Panama Papers inaccessible in mainland China without the use of a virtual private network. The Economist and Time magazine have also been blocked in China in recent weeks after both magazines published prominent articles that were critical of Xi Jinping.

China’s foreign ministry had already dismissed some reports of the Panama Papers on Tuesday as “groundless accusations”.

On Thursday, when asked about the revelations by the Guardian, a foreign ministry spokesman said: “My colleague has already taken this question. We have no comment on this.”

Asked why Chinese state media had avoided covering the leaks, the spokesman added: “You can ask the media, not me, for an answer.”

Sarah Cook, a China specialist from the Freedom House advocacy group, said the intense censorship operation under way reflected Beijing’s fears that disclosures about the wealth of its political elite could spark public anger or even fuel opposition to Xi from within the party itself.

“These are methods of storing assets and money that are really for the super, super rich. From that perspective I think there is a fear and a sensitivity among Communist party leaders that this exposes the degree to which the political and economic elite are so closely intertwined and so far above your average citizen in terms of wealth,” she said.

Xi Jinping has launched a high-profile crackdown on corruption since taking power, cautioning party members that the continued pillaging of public funds could topple the party. “Many worms will disintegrate wood,” Xi warned in a 2013 speech.

The Chinese president has also ordered party officials to avoid public demonstrations of wealth in an attempt to improve the party’s image.
“This kind of blows a big hole in that effort because it exposes how the top political leaders and their families are, at the very least, super, super rich – even if this money had been obtained legally, which of course is a big question mark as well,” said Cook.

The relatives of eight of China’s most powerful politicians were named in the Panama Papers, including those of three members of the current politburo standing committee.

They include the brother-in-law of Xi Jinping, the daughter-in-law of propaganda chief Liu Yunshan and the son-in-law of vice-premier Zhang Gaoli, China’s seventh most powerful man.

Deng Jiagui, who is married to Xi’s sister, Qi Qiaoqiao, was identified as a shareholder in two British Virgin Island companies: Wealth Ming International and Best Effect Enterprises.

Jia Liqing, who is married to Liu Yunshan’s son, Liu Lefei, was the director and shareholder of a British Virgin Islands company called Ultra Time Investments Ltd.

Jia’s father is China’s former minister of public security and chief prosecutor, Jia Chunwang, the New York Times reported.

Lee Shing Put, Zhang Gaoli’s son-in-law, was linked to three companies in the British Virgin Islands: Zennon Capital Management, Sino Reliance Networks Corporation and Glory Top Investments Ltd.

Other relatives named in the leaked documents include Li Xiaolin, the daughter of former premier Li Peng, and Hu Dehua, the son of former party chief Hu Yaobang.

Chen Dongsheng, the grandson-in-law of Mao Zedong, was also tied to a British Virgin Islands incorporated company called Keen Best International Limited, according to the International Consortium of Investigative Journalists.

There is no indication of any wrongdoing on the part of any of the Chinese names found in the leaked documents.

But Cook said the revelations came at an unfortunate moment for Xi, who has been facing growing signs of resistance to his rule, including a recent public lettercalling for his resignation.

Last month Chinese security agents launched a manhunt to catch those behind the anonymous letter – signed by “loyal Communist party members” – detaining more than two dozen people suspected of involvement in its publication.

“I think there is particularly a sense that [the Panama Papers revelations] could be damaging for him and his authority at a time when he is already facing challenges to his authority both from critics within the party and people outside of the party,” said Cook.

“You already have this undercurrent of people both outside the party and inside the party questioning his leadership and then something like this comes along that adds another chink in his armour in terms of the persona and the authority he has tried to create for himself.

“It might almost be that this is more dangerous for Xi and for the higher leaders in terms of internal party credibility as much as the broader public.”

Willy Lam, an expert in elite Chinese politics from the Chinese University of Hong Kong, said he also believed revelations involving Xi’s brother-in-law could cause real political damage to the Chinese president although Beijing would paint the Panama Papers as “a western conspiracy to damage the reputation of the party”.

“Xi Jinping is under a lot of pressure, including calls for his resignation. It is possible that his enemies within the party – some of them in quite senior positions – could use this material to damage his reputation. We won’t be able to see from the outside but within the party the backstabbing and infighting could be exacerbated,” Lam said.

“It doesn’t seem that Xi is vulnerable so far but they are waiting for a chance to pounce on Xi. They are all waiting for him to make a mistake.”

Chinese newspapers and television channels have almost totally ignored the Panama Papers following censorship orders, although the state-run Global Times has attempted to portray the revelations as an American conspiracy.

“Very few US public figures were exposed by the Panama Papers, which may be related to the political awareness of the forces behind the leak,” the newspaper wrote.

In a short dispatch about the activities of the politburo standing committee, state news agency Xinhua said China’s seven top leaders had gathered this week to plant saplings to promote environmental protection.

“People plant trees so their offspring can enjoy the shade,” Xi, citing a Chinese proverb, reportedly told his colleagues.

In another story Xinhua reported the resignation of Iceland’s prime minister, Sigmundur Davíð Gunnlaugsson, but made no mention of the Panama Papers.

Analysts predicted Chinese censors would fail to completely block out the news.

“The Great Firewall tends to have a lot of holes in it,” said Andrew Wedeman, a China expert from Georgia State University who is writing a book about Xi Jinping’s war on corruption.

Writing on the China File website, Columbia University scholar Andrew J Nathan said the revelations about offshore assets suggested members of China’s political elite harboured doubts over the Communist party’s future.

“They don’t feel secure at home, but what exactly do they fear? Is it political strife within the regime or the fragility of the regime itself?” Nathan wrote.