Report reveals offshore dealings of China's elite
A trove of leaked financial documents 160 times bigger than the famous Wikileaks classified cables has now revealed the secret offshore banking dealings of thousands of well-connected people in China, Hong Kong and Taiwan.
Reporters from several different news organisations, working together under the International Consortium of Investigative Journalists (ICIJ), reportedly spent months combing through a cache of 2.5 million electronic files to uncover hidden offshore accounts held by Chinese citizens.
The BBC was not involved in the compilation of the ICIJ report and has not been able to independently verify its contents.
The report's authors say they have found evidence of the secret business dealings of some of China's richest and most powerful people, including China's richest woman, Yang Huiyan, and the brother-in-law of China's President, Xi Jinping.
Strictly speaking, it is not illegal for a Chinese citizen to set up a company in an offshore tax haven, like the Cayman Islands or the British Virgin Islands. In order to circumvent Chinese regulations making it difficult to list on a foreign stock exchange, Chinese entities often set up offshore parent companies in such locations.
'Legitimate or illegitimate'
"What I think they've documented in this report is the extensive use of offshore tax haven companies by individuals, including many who are connected with the government at fairly high levels," explains Paul Gillis, professor of accounting at Peking University.
"What it doesn't tell us is what these companies were actually being used for and whether those purposes were legitimate or illegitimate."
So are the people named in the leaked documents guilty of anything?
"I think the real concern is if these entities were used to take money that was obtained in illegitimate ways and to hide it outside of China, outside of the jurisdiction of Chinese regulators who might get it, and in ways that evade China's foreign currency laws and its tax laws," he said.
China has long struggled with illegal overseas transfers of capital. According to Global Financial Integrity, a Washington-based non-profit organisation, more than $1tn (£602bn) in illicit funds flowed out of China between 2002 and 2011. That money often comes from criminal activity, tax evasion or state corruption.
However, the ICIJ report received scant public reaction from the Chinese government.
"I don't know the details, but as a reader, I think the logic in the article is unconvincing, which raises suspicions on its intentions," foreign ministry spokesman Qin Gang told reporters on Wednesday.
'We can read it'
News of the ICIJ report has been censored from Weibo, China's version of Twitter. The story was also not mentioned in China's state media outlets, though some in China still managed to uncover the news.
"I read it on social media like Weixin and other microblogs. A lot of people transferred those articles and the text of the report itself. We can read it," explains economist Xia Yeliang.
An outspoken critic of Communist Party rule, Mr Xia was fired from his teaching position at Peking University last year on the grounds of poor job performance evaluations.
Angry Chinese citizens accuse those involved in offshore banking of offloading the state's assets, Dr Xia said.
"The high-ranking officials tried to transfer their capital to foreign countries and foreign markets, so they're trying to take what we have produced and transfer it to foreign countries."
"China has adequate laws to regulate this area. It really comes down to enforcement. Likewise, the United States had adequate laws on foreign bank accounts too, but it was unable to enforce them until it was able to force the Swiss banks to disclose who was actually using those accounts," Paul Gillis said.
New information on those who appear to be involved in offshore banking will soon be released. The ICIJ will soon publish an online list of 37,000 people from China, Hong Kong and Taiwan whose names appear on the leaked documents.
"If the tax bureau does what I expect they'll do, they'll take that list and they'll start asking questions," Paul Gillis predicts.
"Why do you have a BVI company? What's in it? Why didn't you report it when you set it up?"