Panama Papers: Chinese media silenced as scandal draws in Xi Jinping and 'red aristocracy'

Chinese news outlets, like the rest of the world's media, covered the Panama Papers scandal on Monday (4 April), focusing on Vladimir Putin and the US$2bn (£1.4bn) money trail that allegedly led to the Russian President. But one high profile group of Chinese figures were notable for their absence – the family of Chinese President Xi Jinping.

At least eight top Chinese officials and associates, including President Xi Jinping's brother-in-law Deng Jiagui, are linked to offshore deals that hid millions of dollars, according to an investigation of 11.5 million documents leaked from one of the world's largest offshore law firms.

Documents from the Panamanian law firm Mossack Fonseca indicate that at least eight current or former members of the Communist Party's Politburo Standing Committee were linked to the offshore accounts.

The documents have been sifted through as part of a huge investigative project by the International Consortium of Investigative Journalists (ICIJ) and links offshore accounts worth billions of dollars to world leaders including Putin, Syrian President Bashar al-Assad, Ukrainian President Petro Poroshenko, Pakistan's PM Nawaz Sharif and the King of Saudi Arabia.

But early Monday local media only covered how the leak was affecting other world leaders, including Putin. Soon even those reports were also taken down.

As expected on China's tightly controlled Internet, news reports about the investigation vanished within hours of their publication. The ICIJ website has been blocked in mainland China and cannot be accessed without a virtual private network proxy.

"Putin's close friend is involved in money laundering," wrote China Business Journal on the Sina Weibo social platform, giving a detailed account of the allegations against Russia's president.

By Monday afternoon, Putin had become the fourth most trending topic on Sina Weibo, but all of the remaining entries were light-hearted, funny posts or images of Putin the "iron man."

A search for "Panama Papers" on Baidu, the popular Chinese search engine, revealed only two relevant entries, but both had been taken down.

The ICIJ report has so far revealed four names among China's red nobility: President Xi Jinping through his brother-in-law Deng Jiagui; Jia Qinglin, China's fourth-ranking official in the Communist Party, through his granddaughter Jasmine Li; former Chinese Premier Li Peng through his daughter, Li Xiaolin; and former Politburo member Bo Xilai, through his associate Patrick Henri Devillers.

Deng Jiagui, Xi's brother-in-law, in 2009 reportedly opened two "shelf companies" based in the British Virgin Islands and part of Mossack Fonseca's inventory. It is unclear what the companies were used for.

A Bloomberg News investigation in 2012 revealed that Deng and his wife, Qi Qiaoqiao, had hundreds of millions of dollars in real estate, share holdings and other assets. By the time Xi became general secretary of the Communist Party in 2012, Deng's two companies were dormant.

Jia Qinglin was China's fourth-ranking official in the Politburo Standing Committee from 2002 until 2012. In 2010, the founder of a luxury watch distributor transferred Jia's granddaughter, Jasmine Li, a British Virgin Islands-based company for $1. Li was also the sole shareholder of another company incorporated in the BVI. The two offshore companies are the parent companies of two Beijing-registered consulting firms.

Li Peng was China's premier between 1988 and 1998 and Chairman of the Politburo's Standing Committee between 1998 and 2003. His granddaughter Li Xiaolin served as president of China Power Investment Corporation, a state-owned power company. Li and her husband were the owners of a Lichtenstein foundation that was the sole shareholder of a company incorporated in the British Virgin Islands. The company's source of funds was reportedly business profits from helping clients of the couple's Swiss lawyer to export heavy machinery from Europe to China.

The fourth official, Bo Xilai, was a member of the Central Politburo and secretary of the Communist Party's Chongqing branch between 2007 and 2012. He previously served as Minister of Commerce. Bo is currently serving a life prison sentence on accusations of corruption.

Xilai's wife, Gu Kailai, was given a suspended death sentence for the murder of a British businessman in 2011. French architect Patrick Henri Devillers helped Gu incorporate a company in the British Virgin Islands, which she used to purchase a luxury villa in the south of France using a $3.2m bribe that Bo had received from a Chinese businessman.

Chinese officials are not required to publicly disclose their assets, but politicians' wealth has been a sensitive topic in China, where Xi in late 2012 launched and "anti-graft campaign" targeting officials suspected of corruption.

A previous ICIJ investigation into China and Hong Kong's offshore accounts showed that every corner of the world's second largest economy, "from oil to green energy and from mining to arms trading" is linked to the offshore accounts. Between $1tn and $4tn in untraced assets have reportedly left the country since 2000.