Fan Bingbing, one of China’s most famous actresses, mysteriously disappeared for three months after being accused of tax evasion. On Wednesday she broke her silence, offering a simpering apology to Beijing and swearing to change her ways.
Her fall from grace serves as a powerful warning shot from China to show that nobody can escape their scrutiny.
Tax authorities in China’s Jiangsu province on Sunday found that the 37-year-old actress and her companies evaded 248 million yuan ($34 million/£28 million) in taxes, but gave no further details on the companies or this figure.
The state-run Xinhua News agency, a prominent mouthpiece for the Chinese Communist Party, reported that tax authorities fined the star $129 million in unpaid tax and fines, citing government tax officials.
Almost straight afterward, they ran a separate story entitled: “Fan Bingbing’s case is a warning to the literary and entertainment industries to follow the law.”
“Nobody is too high” for the Chinese government
Roderic Wye, an associate fellow at Chatham House and former first secretary in the British Embassy in Beijing, said that Fan is being made an example of, to prove that the state can come for anybody.
China is grappling with tax evasion cases both within and beyond the entertainment industry, and Fan’s disappearance and punishment shows Beijing’s eagerness to crack down.
China’s message is that “nobody is too high, nobody is above, nobody can escape government scrutiny,” Wye told Business Insider.
He said that Fan’s humbling is “partly a periodic [drive] to crack down on high-level earners, but more importantly it’s part and parcel of the [national campaign] for a new, modest patriot serving the national cause, instead of private gain.”
“That’s one of the messages put across by the [Communist Party] and it helps to have a high-profile example like Fan Bingbing, who people know,” he said.
Wye added that public disappearances such as Fan’s was not unusual, especially in politics.
“It is often a sign that someone has got into trouble if they fail to appear in public doing their normal duties for a period of time in,” the former diplomat said.
Will Fan’s humbling work?
Wye said that Fan’s case would likely scare other people in the entertainment industry into making sure they file their taxes properly, but said it was unlikely to tackle the problem entirely.
“High earners in the entertainment industry and [beyond], I suspect, would be looking to their tax returns and make sure they conduct themselves fully in accordance with China’s message,” Wye said, which says that “people should be properly respectful of the law and properly respectful of the new morality in China.”
But he added: “Tax evasion happens all the time, and if China becomes richer and richer, and more and more money sloshes around the system, there will be more and more opportunities for people and businesses to divert it into non-government-approved channels.
“I think it is inevitable under those circumstances that there will be examples of tax evasion and examples of corruption in the government.”
“I don’t see this [Fan’s punishment] as a revenue raising measure, but more of a political social measure to ensure conformity with a behavior of norms that the government wants people to follow,” he added.
Fan’s financial punishment was “determined by the people’s will and hearts, and helps promote the healthy development of literature and art in the new era,” the state news agency Xinhua reported earlier this week.
Such moralistic language is not uncommon in China, which relies on similar discourse to justify its policies and make sure nobody defies it.
The country ranks its citizens with a social credit system, which aims to reinforce the idea that “keeping trust is glorious and breaking trust is is disgraceful,” according to a government document.
Fan is not the first prominent celebrity to be publicly humiliated and fined over tax evasion in China.
In 2002, actress Liu Xiaoqing was jailed for about a year and forced to pay 7.1 million yuan ($1 million/£790,000) after being charged with tax vasion, the state-run Xinhua news agency reported at the time.
She was accused of evading nearly 6.68 million yuan ($970,000/£750,000) in taxes from 1996 to 2001, Xinhua said.
After her imprisonment, Liu re-emerged in movies and TV shows in China, and even wrote a book about her time in jail, titled “Rise from the Ashes.”
Fan’s career could also be revived when her tax evasion nightmare is over. She could avoid criminal charges if she repays the money in time, Xinhua reported this week.
Australian vitamin brand Swisse, British diamond company De Beers, and French beauty company Guerlain stopped using Fan’s face on their ad campaigns during her disappearance, the South China Morning Post reported.
“Maybe she will find work in Chinese films, and maybe international companies will still be willing to offer her jobs,” Wye said. “I don’t think it’s necessarily the end of her career.”