On this episode of China Uncensored,
the Panama Papers are out
and they’re not looking so good for China.
Hi, welcome to China Uncensored, I’m your host Chris Chappell.
The Panama Papers. The thing everyone’s talking about!
What are they? A sign capitalism is working!
It’s the biggest data leak in history.
An anonymous source leaked eleven-and-a-half million documents from the world’s fourth
biggest offshore law firm,
Mossack Fonseca, based in Panama.
Wikileaks? Just a drip.
Edward Snowden? More like snowed in
by the avalanche of data coming out in the Panama Papers.
Contained in 2.6 terabytes of data. Or roughly 2 million of these guys.
The Panama Papers reveal a wealth of information about the wealth of some of the wealthy people
in the world.
They tell us that at least 140 politicians, including 12 national leaders, their families,
or just their good buddies
have used Mossack Fonseca to dump their money into overseas tax havens.
The Guardian calls it... “offshore pandemonium.”
The process is technically legal.
It allows people and companies to take advantage of low or nonexistent tax rates in places
like Panama and the Cayman Islands,
so they don’t have to pay as much in taxes at home.
Tax havens are also great places to hide money,
since there's very little transparency.
There’s a good summary here from TestTube News.
And don’t worry! You benefit from tax havens, too.
Ever use Amazon, Apple, or Google?
They all use them. And since you’re watching this on YouTube, which Google owns,
you’re taking part in the wonderful web of tax havens right now.
Yes, capitalism is great!
And perhaps no one knows this as well as
the Communist Party of China.
"So as for the so-called documents you mentioned
I'm afraid we first must get clarification and understand what it's really about."
Ok, here's some clarification on those so-called documents.
The Panama Papers revealed that one third of Mossack Fonseca's business came just from
China, including Hong Kong.
They have more offices in China than in any other country.
At least 8 family members of current and former members of China’s supreme ruling body,
the Politburo Standing Committee, have been exposed in the Panama Papers.
Jackie Chan got in on the action, too!
But again, this is all technically legal.
Tax havens just make sure that wealthy people don’t have to pay as much in taxes.
Because if wealthy people give their money to the government,
it might be spent on wasteful things, like education, healthcare, and social services.
That’s way less practical than, say, this.
Sorry, I mean this.
But unlike in other countries, in China,
the wealthy and powerful aren’t just trying to avoid taxes.
They have another reason for using offshore accounts, too.
“China’s economy is slowing, and Chinese citizens are getting nervous.
They’re sending money overseas at an unprecedented rate.”
But it's not just the slowing economy.
As Willy Lam, a political analyst with the Chinese University of Hong Kong told the BBC,
it’s "simply because there is very little faith in the future of the Party."
"So there is all this insecurity in China for the wealthy people and for the politicians,
of course that created a lot of demand for these offshore companies.
In other words, even the families of top Chinese leaders
don’t want all of their money stored in China
where it could be seized in a corruption investigation,
or the political system could simply just implode.
But this is all a bit embarrassing for Chinese leader Xi Jinping.
Especially because it comes in the midst of his anti-corruption campaign;
and especially because he just came out with his Three Stricts and Three Earnests slogan;
and especially because his own brother-in-law was named in the Panama Papers.
So is it hypocritical of Xi to be talking about anti-corruption
when three of the most powerful men in China
have had family members who’ve used offshore accounts?
Yes, but that’s besides the point.
Because as I’ve said many times,
Xi’s anti-corruption campaign was never really about stopping corruption.
It’s about using these corruption investigations to eliminate his political rivals.
So obviously the Panama Papers have become fairly politically sensitive in China.
How are authorities dealing with it?
Denial.
"We will not comment on such groundless accusations."
And of course, censorship.
They’re even purging the word “Panama” from the Chinese Internet.
Good thing China has an alternative to Panama.
So while some Chinese netizens are lost...
others have created a workaround:
Using homophones for “Panama”
that is, different characters with the same sound.
Like this user, who wrote,
“Looks like even Buddha had an account in Panama.”
What we know so far about the Panama Papers is only the tip of the iceberg.
The leaked documents themselves haven't been made public,
so we don't know the extent of what’s in all of those floppy disks.
And Mossack Fonseca is only the fourth largest offshore law firm.
There's plenty more that we don't know.
One thing is clear though:
Wealthy Chinese are increasingly moving their money out of China,
which is not a good sign.
Unless you’re Donald Trump...
“I love China. I sold an apartment for $55 million to a Chinese gentleman.”
...and you don’t ask questions about where the money comes from.
Thanks for watching China Uncensored. What do you think about the Panama Papers?
Once again I’m Chris Chappell, don't forget to like and subscribe, see you next time.