Xi Jinping in quandary over Panama Papers

April 13, 2016 By Tenzin Tseten*

The Panama papers have brought many world elites to their knees, including the latest resignation from Iceland Prime Minister Sigmundur David Gunnlaugsson and growing public anger toward British Prime Minister David Cameron for his family’s involvement in the Panama scandal. On the other side of the world, Chinese President Xi Jinping was indirectly involved in the Panama scandal. That is to say his brother in law secretly owns several offshore companies. In fact the report released by the International Consortium of Investigative Journalists (ICIJ) was not surprising. The New York Times and Bloomberg News in 2012 respectively chronicled on then premier Wen Jiabo and incumbent president Xi’s detailed family wealth.

However, the story became more interesting after the ICIJ disclosed family members of at least three of the seven incumbent members of China’s Politburo Standing Committee who secretly own offshore companies arranged through Mossack Fonseca, a law firm based in Panama. The daughter-in-law of Liu Yunshan, head of the Central Propaganda Department and the son-in-law of Vice Premier Zhang Gaoli, were named in the report.

Although it is not illegal for Chinese citizens to own offshore companies, but the revelation provide further insight into how China’s political elites’ are hand in glove with international law firms like Mossack Fonsecca to transfer their wealth to tax havens such as the British Virgin Islands and the Seychelles.

Nevertheless, the deeply embraced practice of sending money overseas has been widely practiced during the administration of Hu Jintao. According to a record reviewed by The New York Times, family members or close business associates of at least five of the nine members who served on the Politburo Standing Committee from 2007 through 2012 had links to offshore accounts.

Much has been written about Hu’s weak leadership while he was the top man in China. We have to accept the fact that Hu undertook anti-corruption drive in the upper echelons of the party, but never in the history of the communist party have we seen such scale and intensity under the helm of Xi. The caged to Zhou Yongkang, once the extremely powerful man in China who held law and domestic security under his belt, was considered an unprecedented move choreographed by Xi and Wang Qishan, head of the Central Commission for Discipline Inspection.  Countless low ranking officials have been caught and punished under the ongoing anti-corruption drive.

The fear has spread to every nook and cranny of the party and state apparatus, including the SOEs. Xi’s decision to take down two former vice chairmen of the Central Military Commission had stunned the entire military apparatus. Several generals after the incident said to have pledged their unswerving loyalty to Xi.

The campaign has gone much further than anyone anticipated. Wang and his anti-corruption team flexes their muscles in Hong Kong and Macau which many believe have an adverse effect on mainland’s economy.

A pressing question is whether Xi would allow Wang to investigate China’s elites named in the leaked documents. Unfortunately, the recent records doesn’t favor this argument. In 2013 founder of the new citizens’ movement Xu Zhiyong was arrested on the ground that he was creating social disturbance and chaos in society. The movement was against corruption and called for Chinese leaders including Xi to declare their assets to public. Many other civil rights activists who called for Xu’s release were also detained. Moreover, a month back, several journalists and their families were detained over a couple of anonymous letters that call for Xi to resign from all the positions.

At this point of time the only thing Xi could do to save his image of popular leader cemented on anti-corruption campaign is internet censorship which he has already well executed.

 

_______________

*Tenzin Tseten is a research fellow at the Tibet Policy Institute. Views expressed here do not necessarily reflect those of the Tibet Policy Institute.

Print Friendly
Share on FacebookTweet about this on TwitterShare on Google+