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The Panama Papers are super awkward for Beijing

The "Panama Papers" apparently implicate a number of high-profile global figures in potentially illegal financial activities. (Video: Deirdra O'Regan/The Washington Post)

The Panama Papers, a massive report that claims to document shady business dealings by a who’s who of the global elite, landed in China on a national holiday, presenting the authorities with an interesting, probably vexing, question: how to scrub the Web of the juicy-but-as-yet-unconfirmed disclosures about politically connected Chinese?

The findings -- the result of a year-long collaboration between a German newspaper, Süddeutsche Zeitung, the International Consortium of Investigative Journalists and more than 100 media outlets -- set out to expose “a cast of characters who use offshore companies to facilitate bribery, arms deals, tax evasion and drug trafficking."

That includes, by ICIJ’s count, dirt on 140 political figures, including 12 current or former heads of state. It also names the family members of eight current or former members of China’s politburo, according to the Guardian’s tally.

One of the people mentioned in the report is Deng Jiagui, the brother-in-law of China’s current president, Xi Jinping. Another is Li Xiaolin, the tycoon daughter of China’s former premier, Li Peng.  It lists Hong Kong as a source of key “active intermediaries” in the secretive work.

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Reporting on the 11.5 million tax documents -- some of them leaked -- is being published in batches. And a full account may be days or weeks away. The Washington Post has not seen all of the source material and cannot independently verify what the documents are said to reveal.

The initial reporting hints that a number of Chinese nationals with high-level government ties have dealt with Mossack Fonseca, the Panamanian law firm at the center of the leak. Mossack Fonesca has denied all accusations of illegal activity. The Post has not seen evidence of illegal activity by the Chinese nationals named.

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Although there are legal uses for shell companies, the charges are sure to rile Beijing.

China’s ruling Communist Party does not like to discuss the wealth of its leaders or their families, especially as it wages an aggressive, if selective, anti-corruption campaign.

In 2012, investigations by the New York Times and Bloomberg News revealed the wealth and business dealings of family members of both Xi and former premier Wen Jiabao.  The reports were blocked in China and resulted in both companies being denied some journalist visas for several years.

In 2014, a report jointly published by the ICIJ and the Center for Public Integrity found 22,000 alleged tax haven clients from Hong Kong and China. That investigation found offshore accounts linked to more than a dozen of China’s richest people, including members of the National People’s Congress and executives from state-owned firms caught up in corruption probes.

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The 2014 report made specific mention of relatives of Wen and Xi. Two red letter names mentioned in the Panama Papers — Xi’s brother-in-law Deng, and former premier Li Peng’s daughter, Li Xiaolin — were named in their findings as well.

Asked about the story at a Foreign Ministry press conference that year, a Chinese government spokesperson called the investigation “hardly convincing."  The report was subsequently blocked. The Chinese press did not play up the story.

With most of China enjoying a long weekend, the latest report did not immediately make waves online.

On FreeWeibo, a website that tracks search terms and posts that are blocked or deleted, most of the material scrubbed on Monday morning was about a dystopian Hong Kong film, "Ten Years," not the Panama Papers.

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