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Asia

Chinese media speaks no evil over Offshore Leaks

With the help of shell companies, top politicians - among others - in China are alleged to have hoarded billions of dollars in tax havens. The revelations have been noticeably absent from media in the People's Republic.

Bird flu, Sino-Japanese relations and the exceptional events taking place in Thailand were among the themes that the website of Chinese daily newspaper "Global Times" was addressing on Wednesday.

The web page of the Chinese state news agency Xinhua carried similar content. Neither outlet mentioned anything about the latest revelations from Offshore Leaks that relate specifically to China.

Hu Jintao (L) congratulates Xi Jinping at the fourth plenary meeting of the first session of the 12th National People's Congress (NPC) in Beijing, capital of China, March 14, 2013. Xi was elected president of the People's Republic of China (PRC) and chairman of the Central Military Commission of the PRC at the NPC session here on Thursday. (/Pang Xinglei) (hdt)

Relatives of Chinese President Xi Jinping and his predecessor, Hu Jintao, are said to be on the list

The name Offshore Leaks relates to a comprehensive mound - totaling 260 Gigabytes - of data that was anonymously leaked to the media in 2011 by the Washington-based International Consortium of Investigative Journalists (ICIJ).

The material brings with it some serious implications for the Communist leadership in Beijing. China's powerful elite appears to have conducted lucrative business transactions using bogus companies in international tax havens over a number of years.

The allegations went to the heart of government, and the list of individuals implicated was long. It included, for example, relatives of both the current President Xi Jinping and his predecessor Hu Jintao. Relatives of former prime ministers Wen Jiabao and Li Peng were linked with secret transactions in the Caribbean.

In addition, numerous National People's Congress members were in the frame, along with top executives and some of the richest men and women in the country.

Since July 2013, journalists in Europe, the US, Hong Kong and Taiwan have been paying particular attention to the mound of information that relates to China, consciously treating it separately from the rest. Now the revelations are being published.

A mammoth task

The special treatment was felt necessary because such a large number of names on the list were Chinese. As a result, the consortium decided to look at the People's Republic in isolation. In Germany, journalists from the Süddeutsche Zeitung newspaper, as well as the broadcaster Norddeutsche Rundfunk were involved in the research.

Symbolbild Steueroasen British Virgin Islands

Cook Island and the British Virgin Islands are renowned in the Caribbean for its financial services

”The first stage of the work entailed creating lists of people who interested us: relatives of high-ranking politicians, billionaires and even celebrities,” explained Christoph Giesen from the Südddeutsche Zeitung. The names were compared with the offshore documents. According to the ICIJ , there was data on 122,000 shell companies and trusts, in connection with which 130,000 names came to light. “From those names, more than 35,000 were Chinese,” said Giesen.

“The work was not easy,” said the journalist. ”One particular challenge was to conclusively verify and attribute the names.”

From the beginning, the journalists suspected that their work would not go unnoticed by the Chinese leadership. For security reasons, exchanges between members of the consortium took place only via encrypted mail and an encrypted forum on a German server.

The results exceeded all expectations. “We have some of the real big shots there; the most important people of the past 30 years,” said Giesen. “It really is unparalleled.”

According to ICIJ, more than 21,000 offshore firms of customers from mainland China and Hong Kong are listed in tax havens such as the British Virgin Islands, the Cook Island and Samoa. According to estimates, money and company shareholdings valued at almost three billion euros were moved out of China.

Beijing seems to stem flow

The revelations of the ICIJ do not sit easily alongside the image the Chinese leadership likes to project of itself, of a government that is close to, and representative of the ordinary people.

The amount of awkwardness that the findings present for the leadership is apparent in the absence of reporting about the issue in state media, but also the lengths to which it will go to prevent the information from filtering into the country from the outside. For example, the websites of the international partners of "Offshore Leaks" were blocked, the Süddeutsche Zeitung and Norddeutsche Rundfunk among them.

The Süddeutsche Zeitung has not only published its exclusive report in German, it had also done so in Chinese. However, the Chinese government took measures to deal with the issue on Wednesday (22.01.2013). “Since then the online edition of the Süddeutsche Zeitung has been censored in China,” said the newspaper. “This includes both the international and the German version of the site.”

Website ICIJ

The ICIJ is made up of journalists of more than 60 countries

While the subject has gone largely unnoticed in mainland China, newspapers and websites in Hong Kong have been full of the apparent scandal. “The public here is not especially surprised,” Serenade Woo, Asia-Pacific correspondent of the International Federation of Journalists, told DW.

The reports, said Woo, merely help confirm existing suspicions. “China is a black hole, a system about which we know nothing. As a result, such a thing is no real surprise.”

More news to follow

The “tricks of the princelings,” as the Süddeutsche Zeitung has labelled the dealings, are likely to lead to more headlines this week. The ICIJ has gathered more explosive information, according to Christoph Giese.

“We are going to up the ante with the revelations about China in the days to come,” he added.

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