Leading figures and financial institutions responded to the massive leak of more than 11.5 million documents with denials of any wrongdoing as prosecutors and regulators began a review of the reports from the investigation by the U.S.-based International Consortium of Investigative Journalists (ICIJ) and other media organizations.

Following the reports, China has moved to limit local access to coverage of the matter with state media denouncing Western reporting on the leak as biased against non-Western leaders.

Eoin Treacy's view

The issue of offshore accounts is an emotive one not least for those lacking the financial resources to benefit from the protections they offer. This represents a challenge both for the jurisdictions that provide these services but also for their clients in an environment where supposedly private correspondence can be publicly aired. It’s all the more puzzling because many of the legal services that can be provided by these firms are often achievable by staying onshore but structuring one’s affairs in line with the valid interpretations of domestic law. 

This article from marketplace.org carries more details of how a number of China’s leading families have been implicated in the Panama Papers. It helps to highlight how senior Party officials have no problem with moving wealth offshore while at the same time ensuring the general population obeys capital controls. This is bad publicity right now as the Dollar trends higher against the Renminbi and demand for a hedge is increasing.

The Shanghai A-Share Index continues to unwind its oversold condition relative to the trend mean and a clear downward dynamic would be required to check potential for continued higher to lateral ranging.