While we are watching a new episode in the farce related to Leung Chun-ying, given the airport baggage incident involving his daughter, I urge the public to focus on more serious matters pertaining to China.
I am talking about the Panama Papers, which have exposed the secret dealings of China’s elite in offshore tax havens.
Süddeutsche Zeitung, one of Germany’s largest circulated newspapers, received an anonymous letter in early 2015 which contained a staggering amount of classified files from Panama City-based law firm Mossack Fonseca & Co.
These files, 11.5 million in total, were about 214,000 offshore companies and shell businesses owned by political and business elites in 12 countries that the legal firm serviced since its foundation in the 1970s.
The total size of these millions of files, stored in compact discs, is said to be 2.6 terabytes, a storage capacity that is 50 times more than that taken up by all the English articles on Wikipedia.
The German newspaper sought help from the International Consortium of Investigative Journalists, and the latter mobilized 107 volunteers from media outlets in 80 nations worldwide and spent a year consolidating and analyzing all the files.
Now we are seeing the initial findings. All the files will be made public by early May.
What we know at present is an intricate, intermingled network of ties and connections.
For instance, a mainland businessman named Deng Jiagui (鄧家貴), allegedly a brother-in-law of the Chinese President and Communist Party General Secretary Xi Jinping (習近平), founded an offshore firm called Excellence Effort Property Development Ltd. in British Virgin Islands in 2008.
And his firm has since maintained close ties with a number of other similar ones owned by well-connected, resourceful persons who are either relatives or proxies of top leaders.
Communist Party mouthpiece Global Daily has tried to defend its bosses after the high-profile exposés, hinting that operating shell companies in tax havens is “not necessarily illegal or for money laundering or tax evasion purposes”.
True, some billionaires want to hide their assets from their spouses, like transferring money to offshore entities before their divorce. But since senior communist cadres, either incumbent or retired, seldom divorce their wives, we choose to believe they aim to whitewash their shadowy proceeds or avoid taxes by using the veiled entities offshore.
So, exactly how many top mainland cadres could be involved?
The Guardian revealed that Mossack Fonseca runs more offices in mainland China than anywhere else in the world, and that most of their clients are mainlanders, who are either owners or benefactors of various offshore firms.
Its second largest market is Hong Kong, and, judging from the English spellings of their names, the legal firm’s many clients in the city may also be immigrants from across the border.
Other than Xi, well-known figures whose relatives own offshore companies include deceased party patriarchs like Mao Zedong (毛澤東) and Deng Xiaoping (鄧小平).
Many high-ranking leaders are also on the list: Liu Yunshan (劉云山), a current member of the Politburo Standing Committee (the Communist Party’s top decision-making body); Zhang Gaoli (張高麗), a Politburo Standing Committee member cum Deputy Premier; Hu Yaobang (胡耀邦), former general secretary of the party; Li Peng (李鵬), former Politburo Standing Committee member and former premier; and Wen Jiabao (溫家寶), former Politburo Standing Committee member and former premier.
Other names include Zeng Qinghong (曾慶紅), former Politburo Standing Committee member and former vice president; Jia Qinglin (賈慶林), former Politburo Standing Committee member and former chairman of the Chinese People’s Political Consultative Conference; Tian Jiyun (田紀雲), former vice chairman of the National People’s Congress; and Bo Xilai (薄熙來), former party secretary of Chongqing.
The long list includes all, feuding factions within the party and this time, the exposé differs from a previous one three years ago by Bloomberg and the New York Times, which, according to some observers, mainly targeted at Jiang Zemin’s (江澤民) political foes like Xi and Wen, who have reportedly allied against the former president.
The Panama Papers are but proof that, no matter what coterie they belong to, all communist cadres channel their grey wealth overseas while asking the public to be patriotic and submit themselves to the party.
The Chinese language media that have actively reported the scandal are mostly online portals registered in western nations.
While it’s not surprising that mainland newspapers have been ordered to shut up, it’s noteworthy that some of their peers in Hong Kong have also downplayed the Panama Papers news.
After all, it’s deemed unsafe, even more so than talking about Hong Kong independence, to touch upon subjects like party leaders’ assets overseas.
In early 2014, Kevin Lau Chun-to, then chief editor of Ming Pao Daily, was brutally stabbed in broad daylight in Hong Kong. Some observers believe the attack was a result of the newspaper’s critical reporting on China.
Anyone who dares to talk about the sensitive topics may end up just like Lau and be given a harsh lesson. This seems to be the fear in media circles.
This article appeared in the Hong Kong Economic Journal on Apr. 11.
Translation by Frank Chen
[Chinese version 中文版]
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