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Panama Papers Unlikely to Alter China's Crackdown on Corruption


The Chinese language website of the Mossack Fonseca law firm is pictured in this illustration taken April 4, 2016.

The Chinese language website of the Mossack Fonseca law firm is pictured in this illustration taken April 4, 2016.

The massive cache of more than 11 million documents tied to a law firm in Panama, which revealed the business dealings of several of China’s political elite, comes during a crackdown on corruption under China’s President Xi Jinping.

The crackdown has netted more than 30,000 people in China who have been punished for corruption. But critics of this crackdown say its a convenient way for political leaders to banish their enemies.

Willy Lam, a China Scholar at the Chinese University of Hong Kong, said the recent leaks give weight to their argument.

“The fact that so many members of the so-called 'red aristocracy,' the offspring of party members, ministers and politburo members, have been spared adds to people’s impression that Xi Jinping has master-minded the corruption campaign the past two or three years mainly to target his political enemies,” Lam said.

Chinese President Xi Jinping attends the closing session of the annual National People's Congress in Beijing's Great Hall of the People, March 16, 2016.

Chinese President Xi Jinping attends the closing session of the annual National People's Congress in Beijing's Great Hall of the People, March 16, 2016.

More leadership members implicated

Thursday, it was revealed that two more members of China’s ruling leadership were implicated in the papers. A daughter-in-law of Liu Yunshan, the Communist Party’s current chief of propaganda, was a director of Ultra Time Investments, which was incorporated in the British Virgin Islands in 2009. The son-in-law of first-ranking Vice Premier Zhang Gaoli was revealed to be a shareholder of three companies incorporated in the British Virgin Islands: Zennon Capital Management, Sino Reliance Networks Corporation and Glory Top Investments.

Chinese magazines featuring former Chinese President Hu Jintao and former Chinese Premier Wen Jiabao are displayed at a newsstand in Beijing, China, April 5, 2016.

Chinese magazines featuring former Chinese President Hu Jintao and former Chinese Premier Wen Jiabao are displayed at a newsstand in Beijing, China, April 5, 2016.

Having an offshore company is not illegal, but such offshore businesses can be used to launder money and evade taxes.

The trove of emails from the Panama law firm also names family members of five former members of China’s Politburo, as well as the husband of one of Mao Zedong’s granddaughters. President Xi Jinping's brother-in-law also used the firm to establish three companies offshore.

No impact on crackdown expected

Victor Gao, a director of the China National Association of International Studies, said the revelations, while important, are unlikely to impact China’s corruption crackdown.

“The Chinese government’s position is also very clear. They do not want to be budged one way or the other by such disclosures and revelations, or in any case by reports by The New York Times or other newspapers. What they want to do is their own homework, gather information and evidence through their own reliable sources, and deal with corruption as it is, in their own way,” he said.

In recent weeks China has stepped up censorship of any online coverage or conversation about the Panama Papers. Authorities are deleting discussions through social media about the leaks, and “Panama” is now one of the most censored words on the Chinese internet.

WATCH: Panama Leak Sparks Global Investigations

Not aware of leaks

Ding Xueliang, a professor at the Hong Kong University of Science and Technology, said the documents’ revelations will likely have little impact on how politics and business are done in China, in large part because most people in the country are not aware of the leaks.

A man looks at a newsstand with a copy of the day's Global Times displayed on a basket in Beijing, China, Tuesday, April 5, 2016.

A man looks at a newsstand with a copy of the day's Global Times displayed on a basket in Beijing, China, Tuesday, April 5, 2016.



“Even some of the university professors, they have very, very limited knowledge of international reporting on such things. And if you go to ordinary people, sometimes they’ve got something from somebody, and generally that would be very vague, without much knowledge of the source of information,” he said.

Web searches in China for the "panama papers" bring up a warning that the results may not accord with relevant laws and rules and so can't be shown. Earlier this week, China's state-run Global Times newspaper said that Western media use such leaks to damage non-Western countries.

WATCH: Panama Tax Haven Revelations Show How Neediest Nations Are Harmed

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