Relatives of at least five current and former members of China's top leadership are shareholders in many offshore companies, allowing them to conceal their assets, according to a report from the International Consortium of Investigative Journalists (ICIJ).
While being a shareholder in an offshore company doesn't constitute a crime or indicate wrongdoing, the report from the US-based group was released at a crucial moment. For the last year, President Xi Jinping's administration has said it would not tolerate graft and has banned public officials from showy displays of wealth.
The journalists' report hints at the great wealth amassed by some relatives of China's leaders as the public grows increasingly critical of the nation's inequality.
The ICIJ said in its report that it had collected evidence that many Chinese companies and individuals "have used offshore entities to engage in illicit or illegal behaviour".
The report listed a few examples, including a former railway official who pleaded guilty to criminal charges after he funnelled US$2.8 billion into offshore accounts.
China's once richest man, Huang Guangyu, along with his wife Du Juan set up a network of at least 31 British Virgin Island companies from 2001 to 2008, the ICIJ said. At that time they were building the largest consumer-electronics retail chain in the country, GOME. In 2010, Huang was sentenced to 14 years in prison following his conviction for bribery, insider trading and illegal foreign-exchange deals.
The ICIJ said that leaked company records and e-mails - dated until 2010 - showed that several senior Chinese officials and their relatives had held stakes in nearly 35,000 offshore companies - the vast majority of which were incorporated in the British Virgin Islands, but registered in mainland China, Hong Kong, Taiwan and Macau.
The relatives included two children of former premier Wen Jiabao .
Several people mentioned in the report have had long private-sector careers. But the report also covers several Chinese citizens who serve in public-sector jobs and state-owned industries, where it would not be common to hold private stakes in offshore companies.
One example: Li Xiaolin, the glamorous daughter of former premier Li Peng . She is a vice-president of the state-owned China Power Investment Corporation, and has held stakes in two companies registered in the British Virgin Islands, according to the ICIJ.
"China has become a leading market for offshore havens that peddle secrecy, tax shelters and streamlined international dealmaking," the report says. "Every corner of China's economy, from oil to green energy and from mining to arms trading, appears in the ICIJ data."
Professor Dali Yang, a political scientist at the University of Chicago, said the widespread use of offshore companies by China's elite indicated there was concern about the stability of the world's second-largest economy.
The report's release coincided with the start of a trial of Xu Zhiyong, a legal scholar accused of gathering a crowd to disturb public order. He and other participants in the New Citizens Movement have demanded that officials disclose their assets.
According to the report, relatives of Wen held stakes in offshore companies. The New York Times revealed in 2012 that Wen's family had amassed US$2.7 billion in hidden assets during his decade in power. Wen has insisted that he is innocent, according to Hong Kong columnist Ng Hong-mun.
Two of Wen's children, Wen Yunsong and Wen Ruchun, held stakes in offshore companies, according to the ICIJ. Liu Chunhang, Wen Ruchun's husband, is also a stakeholder in such a company, the report says.
Other prominent names with Cook Islands or British Virgin Islands accounts include relatives of Deng Xiaoping and former president Hu Jintao .
The report names officials such as Li Hualin, vice general manager of China National Petroleum Corporation, who was implicated in the ongoing graft investigation against former security czar Zhou Yongkang.
The report also mentions several high-profile businessmen, including some of China's richest people, and Deng Jiagui, a brother-in-law of President Xi.
It is unclear how the ICIJ obtained the documents. It said the files originated with two companies that helped set up offshore accounts: Portcullis TrustNet in Singapore and Commonwealth Trust in the British Virgin Islands. Several attempts by the Post to reach both companies were unsuccessful.
The use of offshore companies raised ethical concerns because businesses had used them to avoid taxes and government oversight in China, said Clark Gascoigne, spokesman of the Washington-based think tank Global Financial Integrity. It has been tracking global illicit money flows since 2006.
"As the rich get richer through tax evasion and by using the world's shadow financial system to shelter and multiply their illicit wealth, the middle class, the working class and the nation's poor suffer," he said, pointing to the government's inability to tax individuals that are able to hide their wealth abroad.
Chinese corporations set up offshore companies for many reasons, including the wish to reduce their tax burden and avoid government oversight, Gascoigne said.
His group estimates that more than US$1 trillion flowed illicitly out of China between 2002 and 2011, making China the world's biggest exporter of illicit capital, beating out Russia and Mexico.
Communist Party leaders have recently tried to discourage members from offloading illegally accrued wealth abroad.
Earlier this month, the party said that officials with close family relatives living abroad would be barred from promotions.
At least 1.2 million cadres would have been affected, according to last year's estimate by Chinese Academy of Governance professor Zhu Lijia.
Steven Lewis, the C.V.Starr Transnational China Fellow at Rice University in Houston, Texas, was sceptical the ban would serve any role other than a symbolic one.
"It'll be a stumbling block for some of these people," Lewis said. "They'll go to slightly more distant relatives."
The ICIJ was established in 1997 by the non-profit Washington, DC-based Centre for Public Integrity to pursue international reporting on crime and graft.
Last year, the ICIJ released a trove of documents showing how public officials in other countries stowed wealth outside their country's borders.
"This is a continuing trend in a world where more and more information is now available covertly or overtly," said Kerry Brown, professor of Chinese politics at the University of Sydney.
"Maybe Xi and his colleagues are being very pragmatic in admitting that the way parts of the political-business elite hid money in the past is no longer feasible," Kerr added. "Like it or not, it will be found out."
The ICIJ's website and those of several media outlets that reported on the leak were blocked in China yesterday.