China warns 'powerful forces' behind Panama Papers -- suggests US to blame

Hostile Western forces are behind the "Panama Papers", a state-run Chinese newspaper alleged Tuesday, as media avoided reporting revelations about Communist leaders and it emerged that the law firm involved has eight offices in the country.

The scandal erupted on Sunday when media groups began revealing the results of a year-long investigation into a trove of 11.5 million documents from Panamanian law firm Mossack Fonseca, which specialises in creating offshore shell companies.

At least eight current or former members of China's Politburo Standing Committee, the ruling party's most powerful body, have been implicated, according to the International Consortium of Investigative Journalists (ICIJ), which co-ordinated the reports.

Mossack Fonseca has offices in eight Chinese cities including Hong Kong, its website showed Tuesday, more than any other country.

Under President Xi Jinping, Beijing has launched a much-publicised anti-corruption drive but has not instituted systemic reforms such as public declarations of assets.

Among those named in the Panama Papers are close associates of Russian leader Vladimir Putin and President Xi's brother-in-law, who was previously identified in a New York Times investigation into the wealth accumulated by Xi's family.

Chinese media have largely avoided reporting on the leaks and social media have been scrubbed of references to them, with foreign news broadcasters such as the BBC blacked out when they report on the issue.

As well as Xi Jinping's brother-in-law, the documents also contained the names of family members of two current Politburo Standing Committee members, Zhang Gaoli and Liu Yunshan, reported the BBC, which took part in the investigation.

Chinese journalists were ordered to delete "all content related to the 'Panama Papers' leak case", according to instructions seen by AFP.

Users on microblogging web site Weibo tried to circumvent restrictions by circulating pictures of Chinese-language articles describing the allegations.

In an editorial the Global Times, a newspaper with close links to the ruling Communist Party, implied the leaks were part of a "disinformation" campaign by Western forces.

It did not mention any of the Chinese revelations, focusing instead on the allegations involving Putin -- as did the Shanghai Daily, which is linked to the government of the commercial hub.

"The documents revealed do have basic political targets," the Global Times said, adding that "Washington has demonstrated particular influence" in previous leaks of sensitive information to the media.

- 'Strike a blow' -

Such actions were "a new means for the ideology-allied Western nations to strike a blow to non-Western political elites and key organisations", it added.

Asked whether China would investigate those named in the reports, foreign ministry spokesman Hong Lei said: "For such groundless accusations, I have no comment."

Corrupt Chinese officials have moved more than $120 billion overseas, according to a 2011 report by the People's Bank of China.

Offshore companies are not illegal and can be used for legitimate business needs. But they commonly feature in corruption cases, when they are used to secretly move ill-gotten gains abroad.

Britain's Guardian newspaper said an internal Mossack Fonseca survey found the biggest proportion of its offshore company owners came from mainland China, followed by Hong Kong.

Hong Kong also housed the greatest number of intermediaries, banks and law firms, among others, that set up offshore corporations on clients' behalf.

Mossack Fonseca's office locations in China include the major financial centres of Shanghai and Shenzhen, as well as port cities Qingdao and Dalian, and lesser-known provincial capitals such as Shandong's Jinan and Hangzhou in Zhejiang, along with Ningbo, also in the eastern province.

Fallen political star Bo Xilai was once the mayor of Dalian, and at least 48 officials from Shandong have been caught up in Beijing's anti-graft campaign according to information maintained by the Asia Society on its Chinafile website.

The Panama Papers document trove was anonymously leaked to German daily Sueddeutsche Zeitung and shared with more than 100 media groups by ICIJ.

In a statement, Mossack Fonseca denied any wrongdoing and said it has always complied with relevant laws and regulations.